In 2012 Through 2016,Shannon Borrowed a Total of $35,000 for Higher

question 80

Multiple Choice

In 2012 through 2016,Shannon borrowed a total of $35,000 for higher education expenses on qualified education loans while supporting herself with a full-time job.In 2016,she had modified adjusted gross income of $50,000.The first year interest on the loan was $850.The amount that Shannon can claim on her tax return is:

• A)$0.
• B)$850.
• C)$425.
• D)$640.

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Definitions:

GAAP

A set of widespread accounting rules and standards, referred to as Generally Accepted Accounting Principles, used for financial reporting.

Fair Value

The estimated market value of an asset or liability, reflecting the amount at which it could be bought or sold in a current transaction between willing parties.

Residual Value

The estimated amount that an asset will be worth at the end of its useful life, often used in calculating depreciation and lease payments.

Straight-Line Method

The Straight-Line Method is a way of allocating the cost of an asset evenly over its useful life, commonly used in depreciation and amortization calculations.