Question

Required Information [The following information applies to the questions displayed below.] Part 1 of 3 In 2018, Laureen is currently single. She pald $2,460 of qualified tuition and related expenses for each of her twin daughters Sherl and Merl to attend State University as freshmen ($2,460 each for a total of $4,920). Sherl and Merl qualify as Laureen's dependents. Laureen also paid $1,780 for her son Ryan's (also Laureen's dependent) tultion and related expenses to attend his Junior year at State University. Finally, Laureen paid $1,280 for herself to attend seminars at a community college to help her Improve her Job skills. What is the maximum amount of education credits Laureen can claim for these expenditures in each of the following alternative scenarios? (Leave no answer blank. Enter zero If applicable.) a. Laureen's AGI IS $45,000 American opportunity credit Lifetime learning credit

Answer 1

Answer:-

a) Laureen's AGI - $45,000

AOTC is AMERICAN OPPORTUNITY TAX CREDIT

For 2 daughter - AOTC is - (2000*2child)+(800*25%+2child)

=4,000+400

=4,400

For Ryan - 1780

AOTC =4400+1780

AOTC =6,180

Laureen lifetime learning credit - Eligible is 2000 (The amount of the credit is 20 percent of the first $10,000 of qualified education expenses or a maximum of $2,000 per return)

so in above case it is - 1280*20% =256 (Since AGI is below clip of 56000 he can claim same)

So, 6,180+256 = 6,436 is eligible deduction

b)

Since AGI is 95000

AOTC can't be calimed if AGI is above 90000 and hence AOTC is zero and Lifetime learning credit can't be claimed if AGI is above 56000.. Hence it is zero education credit

c)

For Daughter it is same as a above i.e. 4,400

For Ryan it is = 2000+(10000*25%) or maximum 4000

=2000+2500 or 4000

so 4000 is allowed

so AOTC total of 8400 and LLC of 256 so claimed is 8,656