Carolyn 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: $3,900 (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, Carolyn has a:
A)Deduction for and deduction from AGI of $0.
B)Deduction for AGI of $4,000 and deduction from AGI of $600.
C)Deduction for AGI of $3,900 and deduction from AGI of $700.
D)Deduction for AGI of $4,100 and deduction from AGI of $500.
E)None of the above.

Question

Quizplus · Accepted Answer

Carolyn can deduct the full amount of her MBA program tuition of $3,900 as a deduction for AGI, as it qualifies as a work-related education expense. She can also deduct the other nonreimbursed expenses of $700 ($300 for books + $200 for other school supplies + $200 for transportation) as a deduction from AGI, as they are miscellaneous itemized deductions subject to the 2%-of-AGI limitation. However, the prompt instructs us to disregard this limitation, so she can deduct the full $700 from her AGI. Therefore, Carolyn can have a deduction for AGI of $3,900 and a deduction from AGI of $700.

Carolyn Is Single and Has a College Degree in Finance