Samantha, who is single and has MAGI of $28,000, was recently employed by an accounting firm. During the year, she spends $2,500

Question

3 years ago

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Samantha, who is single and has MAGI of $28,000, was recently employed by an accounting firm. During the year, she spends $2,500

for a CPA exam review course and begins working on a law degree in night school. Her law school expenses were $4,200 for tuition and $450 for books (which are not a requirement for enrollment in the course).
Assuming no reimbursement, how much can Samantha deduct for the:

a. CPA exam review course? $X
b. Law school expenses? $X

Business

1 answer:

gregori [183] · Answer 1 · 2022-02-01T15:16:46+03:00

Answer:

a. CPA exam review course $0

b. Law school expenses $4,000

Explanation:

1a. CPA exam review course will be $0 because the IRS has disallowed any costs that will lead to qualifying for a different trade .

1b. The Law School expenses will be $4,000 . Based on section 222, Samantha is been limited to $4,000 of the tuition paid.

Therefore the balance of $650 is excess tuition $200 + $450 books which will not qualify under the regular education expense deduction due to the negative position of the IRS on law school costs.