Shellie, a Single Individual, Received Her Bachelor's Degree in 2018

question 31

Multiple Choice

Shellie, a single individual, received her Bachelor's degree in 2018, and took a job with a salary of $45,000 per year. In 2019, she paid $1,500 of interest on qualified education loans. Which of the following statements is correct?

• A)The full $1,500 is deductible in arriving at adjusted gross income (AGI).
• B)If her payment had been $3,000, only $2,000 would have been deductible in arriving at AGI and the $1,000 excess would have been treated as nondeductible consumer interest.
• C)If her income had been $65,000, the deductible amount would have been phased out.
• D)Taxpayers are not allowed a deduction for education loan interest in 2019.

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Definitions:

Adjustable Rate Mortgages

A type of mortgage loan where the interest rate periodically adjusts based on a specific benchmark, affecting monthly payments.

Interest Rates

The cost of borrowing money or the return on savings, expressed as a percentage of the principal amount per period.

Department of Housing and Urban Development

A U.S. government department responsible for national policies and programs that address America's housing needs, improve and develop the nation's communities, and enforce fair housing laws.

Mortgage Loans

Loans secured by real property through the use of a mortgage note, typically used to purchase real estate.