ExpertHard1 markMultiple Choice
CPA · Question 64 · Area IV: Individual Taxation
A taxpayer's student loan interest for the year was $3,000. The taxpayer is single with Modified AGI of $60,000 (below the phase-out range). What is the maximum student loan interest deduction?
A taxpayer's student loan interest for the year was $3,000. The taxpayer is single with Modified AGI of $60,000 (below the phase-out range). What is the maximum student loan interest deduction?
Answer options:
A.
$3,000
B.
$0
C.
$2,500
D.
$1,000
How to approach this question
Student Loan Interest Limit = $2,500 per year. It is an adjustment (above-the-line).
Full Answer
C.$2,500✓ Correct
C
The maximum deduction for student loan interest is $2,500 per year. Since the taxpayer paid $3,000, the deduction is limited to $2,500.
Common mistakes
Deducting the full amount paid.
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