Question

Alice is single and has a college degree in finance. She is employed as a loan officer at a bank; her yearly AGI approximates $50,000. During 2015, she enrolled in a weekend MBA program and incurred the following nonreimbursed expenses: $3,900 (tuition), $300 (books), $200 (other school supplies), and $200 (transportation to and from campus). Disregarding the 2%-of-AGI limitation, as to the MBA program, Alice has a:

a. deduction for AGI of $3,900 and deduction from AGI of $700.
b. deduction for AGI of $4,000 and deduction from AGI of $600.
c. deduction for and deduction from AGI of $0.
d. deduction for AGI of $4,100 and deduction from AGI of $500.
e. None of these choices are correct.

Answer 1

Alice may deduct tuition costs as a deduction for AGI if they are qualifying work-related education expenses, but without additional tax details for the applicable year, it's difficult to determine the exact deductions for other expenses. Therefore, none of the given choices are correct.

Step-by-step explanation:

Alice’s ability to deduct her educational expenses depends on whether the expenses qualify as either a deduction for adjusted gross income (AGI) or deduction from AGI.

Assuming these expenses are recognized as qualifying work-related education expenses, and given the information provided and tax codes related to educational expenses deductions, Alice would likely be able to deduct her tuition costs as a deduction for AGI.

However, without additional specific tax provision details applicable to the tax year in question, it is difficult to determine the exact deductibility of the other expenses.

Since none of the options presented perfectly fit common tax code scenarios, without further information, the most appropriate response to the student's question is that none of the choices are correct.

Therefore, the correct answer is e. None of these choices are correct.