Stephanie and Cal Have Three Dependent Children in College

question 82

Multiple Choice

Stephanie and Cal have three dependent children in college.Sally is a freshman and Teri is a sophomore at a small private college in their town where their expenses are $6,500 per year for each student; Lexi is in her third year of medical school in Wisconsin and her related expenses are $12,500 per year.What is the maximum education credit allowed Stephanie and Cal on their joint tax return if their AGI is $126,000 in 2019 and the LLC phaseout range is $116,000 - $136,000?

• A)$5,000
• B)$6,000
• C)$7,000
• D)$7,500

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Definitions:

Tax Purposes

Criteria or activities specifically considered or accounted for in the calculation or management of taxes.

Personal Use

Use of an asset for private, non-business purposes by an individual or family.

Flow-Through Entity

A business entity where income flows directly to investors or owners, avoiding corporate income tax.

Limited Liability Company

A business structure that combines the pass-through taxation of a partnership or sole proprietorship with the limited liability of a corporation.