Question

Shellie, a single individual, received her Bachelor's degree in 2017, and took a job with a salary of $45,000 per year. In 2018, she began paying interest on qualified education loans. She was able to pay $1,500 in 2018. Which of the following statements is correct?

a The full $1,500 is deductible in arriving at adjusted gross income (AGI).
b If her income had been $80,000, the deductible amount would have been phased out.
c If her payment had been $3,000, only $2,500 would have been deductible in arriving at AGI and the $500 excess would have been treated as nondeductible consumer interest.
d Taxpayers are not allowed a deduction for education loan interest in 2015.

Answer 1

Answer:

The correct answer to the following question is option D) taxpayers are not allowed a deduction for education loan interest .

Explanation:

As per the question Shellie , who is a single individual , got her graduation degree in 2017 and she took a job of $45,000. From 2018 she was able to pay interest on her education loan and she paid $1500 . Now since her annual gross income is less than $80,000, she is allowed a deduction up to $2500. So here the $1500 that she pays for interest on education loan would be allowed for deduction and the whole amount is deductible.