Lewis Is an Unmarried Law Student at State University,a Qualified

question 109

Multiple Choice

Lewis is an unmarried law student at State University,a qualified educational institution.Last year Lewis borrowed $30,000 and used the proceeds to pay his university tuition.This year Lewis paid $1,500 of interest on the loan.Which of the following is a true statement if Lewis reports $40,000 of salary and no other items of income or expense?

• A)Lewis can deduct all the interest on his student loan for AGI.
• B)Lewis can deduct all the interest on his student loan as an itemized deduction.
• C)Lewis can only deduct $1,000 of the interest on his student loan for AGI.
• D)Lewis can only deduct $1,000 of the interest on his student loan as an itemized deduction.
• E)All of the choices are false.

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Definitions:

Express or Implied Authority

Power granted by a principal to an agent, which can be explicitly stated (express) or inferred from actions, circumstances, or job title (implied).

Disclosed Principal

In the realm of agency law, a principal whose identity the third party is aware of when the agent enters into a contract with that third party.

Unauthorized Contract

An agreement made by someone who does not have the legal right or power to do so on behalf of another person or entity.

Agent Lacks Authority

A situation where an agent acts outside of their given powers, potentially making their actions unbinding on the principal.