Which of the following is a true statement?
A)For purposes of the deduction for educational interest, expenses do not include expenses for room, board, and travel.
B)For purposes of the deduction for educational interest, qualified education expenses are those paid for the education of the taxpayer, the taxpayer's spouse, or the taxpayer's dependent.
C)The maximum deduction for interest expense on qualified education loans is $6,000.
D)A penalty paid for prematurely withdrawing a certificate of deposit or similar deposit is deductible from AGI as an investment expense.
E)All of the choices are incorrect.

Question

Quizplus · Accepted Answer

The statement in option B is true. The deduction for educational interest applies to qualified education expenses paid by the taxpayer, the taxpayer's spouse, or the taxpayer's dependent. Room, board, and travel expenses are not considered qualified education expenses. The maximum deduction for interest expense on qualified education loans is $2,500, not $6,000 as stated in option C. Option D is also incorrect, as penalties for early withdrawal of CDs are not deductible as investment expenses. Therefore, option B is the only true statement.

Which of the Following Is a True Statement