Exam 8: Taxation of Individuals

Arnold is single and has two children in college. Maureen is a sophomore, and Rick is a junior. Arnold pays $3,000 in tuition and fees for Maureen and $6,000 for her room and board. Rick's tuition and fees are $5,000, and his room and board expenses are $3,600. Arnold's adjusted gross income is $80,000. What amount can he claim as a higher education tax credit?

For each of the following situations, determine whether or not the item is deductible, how it would be deducted on the taxpayer's return (if there are alternatives possible, discuss the conditions which would determine the treatment) and any limitations which might be placed on the deduction. a.Rickie, who is 35, pays $1,800 for dental work during the current year. b.Jamie incurs $1,400 of employee business expenses during the current year. Her employer reimburses all of the expenses.

Certain interest expense can be carried forward if not deductible in the current year. Which of the following types of interest can be carried forward and deducted in a future year?