Reggie and Ramona Are Married and Have Two Children in College.Jason

question 104

Multiple Choice

Reggie and Ramona are married and have two children in college.Jason is a sophomore,and Justine is a graduate student.They pay $2,500 in tuition and fees for Jason,$900 for his books and $3,000 for his room and board.Justine's tuition and fees are $5,000,her book expense is $800,and her room and board expenses are $2,600.Their adjusted gross income is $170,000.What amount can they claim as a tax credit for the higher education expenses she pays?

• A)$-0-
• B)$1,125
• C)$3,125
• D)$3,638
• E)$4,850

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Definitions:

Equity Method

An accounting technique used for recording investments in associate companies where the investment is initially recorded at cost and adjusted thereafter for the post-acquisition change in the investor's share of net assets of the investee.

Stock Investments-Long

Investments in stock securities intended to be held for a long-term period for capital appreciation, dividend income, or both.

Common Stock

Equity securities representing ownership in a company, entitling holders to vote and share in the company's profits.

Net Income

The financial term for the total earnings or profit of a company after all expenses and taxes have been subtracted from total revenue.