In 2014, Robert, who is single, received his Bachelor's degree and started working. In 2015, he began paying interest on qualified education loans and had modified AGI of $70,000. He paid interest of $1,200 in 2015. Which of the following statements is correct?

Question

Quizplus · Accepted Answer

The phase-out rules for the deduction of qualified education loan interest begin at a modified AGI of $65,000 for a single taxpayer in 2015. The deduction is phased out completely at a modified AGI of $80,000 or higher. For a modified AGI between $65,000 and $80,000, the deduction is gradually reduced. Therefore, if Robert's modified AGI were $75,000, the phase-out rules would reduce his deductible interest to zero. Since his modified AGI is $70,000, only a portion of the $1,200 will be deductible. The amount of the deduction is calculated using a formula based on his income and the amount of interest paid.

In 2014, Robert, Who Is Single, Received His Bachelor's Degree