Bob and Sally are married,file a joint tax return,report AGI of $115,000,and have two children.Del is beginning her freshman year at State College during Fall 2016,and Owen is beginning his senior year at Southwest University during Fall 2016.Owen completed his junior year during the Spring semester of 2015 (i.e. ,he took a "leave of absence" during the 2015-2016 school year).Both Del and Owen are claimed as dependents on their parents' tax return.

Del's qualifying tuition expenses and fees total $5,000 for the Fall semester,while Owen's qualifying tuition expenses were $6,100 for the Fall 2016 semester.Del's room and board costs were $3,200 for the Fall semester.Owen did not incur room and board costs,as he lived with his aunt and uncle during the year.

Full payment is made for the tuition and related expenses for both children at the beginning of each semester.In addition to the children's college expenses,Bob also spent $3,000 on professional education seminars during the year in order to maintain his license as a practicing dentist.Bob attended the seminars during July and August 2016.Compute the available education tax credits for Bob and Sally for 2016.
A)$3,100
B)$5,000
C)$5,480
D)$5,600

Question

Bob and Sally are married,file a joint tax return,report AGI of $115,000,and have two children.Del is beginning her freshman year at State College during Fall 2016,and Owen is beginning his senior year at Southwest University during Fall 2016.Owen completed his junior year during the Spring semester of 2015 (i.e. ,he took a "leave of absence" during the 2015-2016 school year).Both Del and Owen are claimed as dependents on their parents' tax return.
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Del's qualifying tuition expenses and fees total $5,000 for the Fall semester,while Owen's qualifying tuition expenses were $6,100 for the Fall 2016 semester.Del's room and board costs were $3,200 for the Fall semester.Owen did not incur room and board costs,as he lived with his aunt and uncle during the year.
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Full payment is made for the tuition and related expenses for both children at the beginning of each semester.In addition to the children's college expenses,Bob also spent $3,000 on professional education seminars during the year in order to maintain his license as a practicing dentist.Bob attended the seminars during July and August 2016.Compute the available education tax credits for Bob and Sally for 2016.
A)$3,100
B)$5,000
C)$5,480
D)$5,600

Quizplus · Accepted Answer

Bob and Sally qualify for the American Opportunity Credit for Del's tuition expenses and the Lifetime Learning Credit for Owen's tuition expenses. 
For Del's expenses, they can claim up to $2,500 (100% of the first $2,000 and 25% of the next $3,000). 
For Owen's expenses, they can claim up to $1,220 (20% of $6,100). 
Bob's professional education expenses are also eligible for the Lifetime Learning Credit, which allows for up to $2,000 in credit. 
Therefore, the total education tax credits available for Bob and Sally are $5,480 ($2,500 + $1,220 + $2,000).

Bob and Sally Are Married,file a Joint Tax Return,report AGI