Rachel 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 the year, she enrolled in a weekend MBA program and incurred the following nonreimbursed expenses: $4,100 (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, Rachel has a:
a. Deduction for and deduction from AGI of $0.
b. Deduction for AGI of $4,000 and deduction from AGI of $800.
c. Deduction for AGI of $4,000 and deduction from AGI of $700.
d. Deduction for AGI of $4,100 and deduction from AGI of $700.
e. None of these.
b
RATIONALE: Section 222 allows up to $4,000 for qualified tuition and related expenses. As Rachel spent $4,100, she can claim only $4,000 as a deduction for AGI. The remaining expenses of $800 ($100 + $300 + $200 + $200) can be claimed as deductions from AGI.
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