Lewis is an unmarried law student at State University, a qualified educational institution. Last year Lewis borrowed $30,000 and used the proceeds to pay his university tuition. This year Lewis paid $1,500 of interest on the loan. Which of the following is a true statement if Lewis reports $40,000 of salary and no other items of income or expense?
A)Lewis can deduct all the interest on his student loan for AGI
B)Lewis can deduct all the interest on his student loan as an itemized deduction
C)Lewis can only deduct $1,000 of the interest on his student loan for AGI
D)Lewis can only deduct $1,000 of the interest on his student loan as an itemized deduction
E)All of these choices are false.

Question

Quizplus · Accepted Answer

Lewis can deduct up to $2,500 of student loan interest for AGI (above-the-line deduction), assuming he meets the income requirements. Since he paid $1,500 in interest and reports $40,000 of salary, he falls within the income limits for the full deduction and does not need to itemize to claim this benefit.

Lewis Is an Unmarried Law Student at State University, a Qualified