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Practice CPA®CPA REG Practice Exam 3Question 64

Hard1 markMultiple Choice

Area IV: Individual TaxationREGIndividual Tax

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?

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

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.

Question 63 All questions Question 65

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