This Fall Marsha and Jeff Paid $5,000 for Their Son

This fall Marsha and Jeff paid $5,000 for their son Josh's tuition and fees at State University (a qualified education institution) . They also paid $1,000 for Josh's books. How much of these two payments can Marsha and Jeff deduct this year, assuming Josh is their dependent, their modified AGI is $135,000, and 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.

Correct Answer:

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