For Each of the Following Situations,determine Whether the Item Is

question 65

Essay

For each of the following situations,determine whether the item is deductible,how it would be deducted on the taxpayer's return (if there are alternatives possible,discuss the conditions that would determine the treatment)and any limitations,which might be placed on the deduction.
a.Tony and Rika are married and file a joint return.Only Tony is covered by an employee-sponsored pension plan and their adjusted gross income is $178,000.Determine their maximum IRA contribution and deduction for the current year.
b.Elise graduated from Southern University in May of 2012 and immediately started working as a financial analyst for Simone Financial Group.To finance her college education,she borrowed $30,000 from a local bank.In January of 2013,she begins paying back her student loans and pays $2,400 of interest expense during the year.Her adjusted gross income for the year is $63,000.
c.During the current year,Rowland accepts a job as a computer programmer with Davenport Industries.He incurs the following expenses in moving from East Brunswick,New Jersey to Durham,North Carolina.Davenport Industries reimburses him $4,000 for his move.
$\begin{array}{lr}\text { Transportation of household goods } & \$ 2,800 \\\text { Airfare } & 340 \\\text { Temporary living: } & \\\quad \text { Lodging } & 430 \\\text { Meals } & 120 \\\text { House-hunting trip: } & \\\quad \text { Transportation } & 330 \\\text { Lodging } & 280 \\\text { Meals } & 110\end{array}$

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Definitions:

Vicarious Learning

The process of learning by observing the actions and outcomes of others' behaviors rather than through direct experience.

Classical Conditioning

Classical conditioning is a learning process in which a biologically potent stimulus is paired with a previously neutral stimulus, resulting in a learned response to the neutral stimulus.

Self-Efficacy

An individual's belief in their own capability to successfully perform and achieve goals.

Package-Delivery

The process of shipping and delivering parcels or packages from one location to another.