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 a 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 as an investment expense.
E) All of the choices are false.

Question

Quizplus · Accepted Answer

This statement is true according to the IRS. The deduction for educational interest is limited to interest paid on loans used exclusively to pay qualified higher education expenses for the taxpayer, spouse, or dependent. Expenses such as room, board, and travel are not considered qualified expenses. The maximum deduction for interest expense on qualified education loans is also subject to certain income limitations.

Which of the Following Is a True Statement