Lupe Paid the Following Expenses During December 2017 for Her $\begin{array}{lrr}\text { Tuition } & \$ 16,000 \\\text { Housing } & 6,000 \\\text { Meal plan } & 2,500\end{array}$

question 83

Multiple Choice

Lupe paid the following expenses during December 2017 for her son David's spring 2018 college expenses.The semester begins in February 2018. $\begin{array}{lrr}\text { Tuition } & \$ 16,000 \\\text { Housing } & 6,000 \\\text { Meal plan } & 2,500\end{array}$ In addition,David's grandfather paid $500 in fees on behalf of David directly to the college.David is claimed as a dependent on Lupe's tax return.How much of the above expenses qualify for purposes of Lupe's education credit deduction in 2017?

• A)$8,500.
• B)$16,000.
• C)$16,500.
• D)$24,500.

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Definitions:

Distortionary Tax

Taxes that cause people to alter their behavior in a way that distorts the allocation of resources from their most efficient uses.

Economic Choices

Decisions made by individuals, households, or firms regarding the allocation of scarce resources to satisfy needs and wants.

Income Tax

A tax levied by governments on individuals or entities' income, constituting a major source of government funding.

Present and Future Consumption

The concept of analyzing and balancing what is consumed today against what will be available or necessary for consumption in the future.