This Year Riley Files Single and Reports AGI of $66,000

question 62

Multiple Choice

This year Riley files single and reports AGI of $66,000.Riley paid $1,200 of interest on a qualified education loan.What amounts can Riley deduct for qualifying education interest?

• A)The deduction for qualifying education interest is $1,200.
• B)The deduction for qualifying education interest is $1,000.
• C)The deduction for qualifying education interest is $720.
• D)The deduction for qualifying education interest is $200.
• E)None of thesE.Riley may deduct the amount paid ($1,200) up to $2,500,reduced by the phase-out amount.The phase-out amount is the amount paid up to $2,500 ($1,200 for Riley) multiplied by 40% [66,000 - 60,000]/15,000 = 40%].Hence,Riley may deduct $720 [$1,200 - [$1,200 × 40%] = $720].

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Definitions:

Hierarchies

Systematic organization of people or things within a structure that ranks them in levels of importance or status.

Chunking

A cognitive strategy that involves breaking down information into smaller, manageable units to improve memory and understanding.

Semantic Processing

The way the brain interprets and understands the meaning of words and language.

Deep Processing

A cognitive processing approach that involves thoughtful consideration of the meanings and implications of information.