nstructions : Choose the best multiple choice answer and explain why you chose t
ID: 2580681 • Letter: N
Question
nstructions : Choose the best multiple choice answer and explain why you chose the answer. MUST provide 2-3 sentence brief explanation and show all work. All sources must be noted.
____ 19. Which of the following statements is true regarding the education tax credits?
a.
The lifetime learning credit is available for qualifying tuition and related expenses incurred by students pursuing only graduate degrees.
b.
The American Opportunity credit permits a maximum credit of 20% of qualified expenses up to $10,000 per year.
c.
The American Opportunity credit is calculated per taxpayer, while the lifetime learning credit is available per eligible student.
d.
Continuing education expenses do not qualify for either education credit.
e.
None of the above statements is true.
a.
The lifetime learning credit is available for qualifying tuition and related expenses incurred by students pursuing only graduate degrees.
b.
The American Opportunity credit permits a maximum credit of 20% of qualified expenses up to $10,000 per year.
c.
The American Opportunity credit is calculated per taxpayer, while the lifetime learning credit is available per eligible student.
d.
Continuing education expenses do not qualify for either education credit.
e.
None of the above statements is true.
Explanation / Answer
Answer : e. None of the above statements is true.
Explanation : The reasons why the statements are incorrect as follows :
a) The lifetime learning credit is available for individuals who are beyond the first two years of post - secondary education.
b) American Opportunity credit is equal to 100 % of first $2,000 of the qualifued expense + 25 % of expense excess of $2,00 with maximum credit per student per year limied to $ 2,500. The limits given in the question is for lifetime learning credit & not American Opportunity credit.
c) lifetime learning credit is calculated per taxpayer , while American Opportunity credit is is available per eligible student.
d)There are some Continuing education expenses which do qualifies for the lifetime learning credit.
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