This Fall Manfred Enrolled in the Law School at State

question 104

Multiple Choice

This fall Manfred enrolled in the law school at State University (a qualified educational institution) and paid $6,200 in tuition. Until his enrollment Manfred worked as a stock broker and this year he reports $70,000 in wages. If Manfred files single and reports no other items of income or expense how much of the tuition can he deduct as a business expense?

• A)Manfred can deduct half of his tuition for AGI.
• B)Manfred can deduct half of his tuition as a miscellaneous itemized deduction.
• C)Manfred can deduct $6,200 for AGI.
• D)Manfred can deduct $6,200 as a miscellaneous itemized deduction.
• E)None - the tuition is not deductible as a business expensE.The deduction for business educational expenses is limited to education that maintains or improves the taxpayer's skill in their existing trade or business.A deduction is not allowed for education that qualifies the taxpayer for a new profession (e.g., law school).

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Definitions:

Work In Process

Stock comprising products that are currently being manufactured but are not yet finished.

FIFO Method

A method of inventory valuation where the first items produced or purchased are the first ones to be expended or sold.

Equivalent Units

Units of production expressed in terms of fully completed units; a concept used in manufacturing to measure output in a period that factors in incomplete units.

Material

The substance or substances from which something is made or can be made, often used in reference to supplies used in manufacturing.