Karen Is Single and Graduated from Marring University in May

question 112

Multiple Choice

Karen is single and graduated from Marring University in May of 2013. In January of 2014, she begins repaying her student loans and in 2014 pays $2,800 of interest on the loans. Her adjusted gross income is $51,000. I. Karen can deduct $2,500 of interest as a deduction for adjusted gross income. II. Karen can deduct $2,800 of interest as a deduction from adjusted gross income.

• A) Only statement I is correct.
• B) Only statement II is correct.
• C) Both statements are correct.
• D) Neither statement is correct.

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Definitions:

Stated Value

A value assigned to a security or asset which is not determined by market forces.

Shares

Ownership segments in a corporation or financial asset, allowing for an equal share in declared profits, distributed as dividends.

No-Par Common Stock

Equity securities issued without a par value, where the board of directors determines the issuing price.

Par Preferred Stock

Preferred shares of a company's stock issued at a specific nominal value and with fixed dividend payments.