This Fall, Josh Paid $5,000 for His Tuition and Fees

This fall, Josh paid $5,000 for his tuition and fees at State University (a qualified education institution) . Assume that Josh is Marsha and Jeff's son and that Marsha and Jeff claim Josh as a dependent. Marsha and Jeff's modified AGI is $100,000. How much of Josh's $5,000 tuition and fees payments can Marsha and Jeff deduct this year (assume the 2013 rules apply for purposes of the qualified education expense deduction) ?

A) Marsha and Jeff can deduct $5,000 for AGI.
B) Marsha and Jeff can deduct $4,000 for AGI.
C) Marsha and Jeff can deduct $2,500 for AGI.
D) Marsha and Jeff can deduct $2,000 for AGI.
E) None - the tuition is not deductible by Marsha and Jeff.

Correct Answer:

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