Nick and Katelyn Paid $1,600 and $2,100 in Qualifying Expenses

question 126

Multiple Choice

Nick and Katelyn paid $1,600 and $2,100 in qualifying expenses for their two daughters,Nicole and Naomi,respectively,to attend the University of Nevada.Nicole is a sophomore and Naomi is a freshman.Nick and Katelyn's AGI is $202,000.What is their allowable American opportunity tax credit?

• A)$0.
• B)$2,000.
• C)$3,060.
• D)$3,700.

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Definitions:

Money Income

Refers to the total amount of monetary earnings or receipts accruing to an individual or entity over a period, including wages, salaries, benefits, and income from investments.

Income Effect

The variation in a person's or an economy's earnings and its effect on the amount of a product or service that is requested.

Money Income

The total amount of monetary earnings or receipts accruing to an individual or household over a specified period of time.

Purchasing Power

The value of a currency expressed in terms of the amount of goods or services that one unit of money can buy.