Question

In August 2017, Marisela took out a $10,000 qualified student loan to pay the tuition at State College. In 2019, she refinanced the student loan for an additional $5,000 that she used to buy a car to drive to and from campus. Under the terms of the refinanced loan, Marisela will be charged an additional $150 a year in interest. When completing her income tax return, Marisela can deduct what amount of the additional interest she is charged for her refinanced student loan

Answer 1

$0

Step-by-step explanation:

In order to deduct student loan interests, the loan must be taken while the college student is enrolled and actively taking the course. In this case, Marisela took the student loan in 2017 when she was a student. If she refinanced the loan in 2019 in order to buy a car, she cannot deduct any interests from that portion of the loan.