Karen is single and graduated from Marring University in May of 2012.In January of 2013,she begins repaying her student loans and in 2013 pays $2,800 of interest on the loans.Her adjusted gross income is $51,000.
I.Karen can deduct $2,500 of interest as a deduction for adjusted gross income.
II.Karen can deduct $2,800 of interest as a deduction from adjusted gross income.

Question

Quizplus · Accepted Answer

According to current tax laws, individuals can deduct up to $2,500 of student loan interest as a deduction for adjusted gross income. Therefore, statement I is correct while statement II is incorrect as it exceeds the maximum amount allowed for the deduction.

Karen Is Single and Graduated from Marring University in May