This is US Tax and Law Jack paid $1,800 in interest for hisstudent loan in 2021. What is the taxtreatment of this interest payment?Not deductible because Mary andJack's AGI exceeds the statutorythresholdDeductible on Schedule EDeduction from AGI on Schedule AO Deduction for AGI as a businessexpense

Interest paid on an eligible student loan during the year is referred to as student loan interest.…

Answered: Jack paid $1,800 in interest for his…

Individual Income Taxes

43rd Edition

ISBN:9780357109731

Author:Hoffman

Publisher:Hoffman

Chapter18: Accounting Periods And Methods

Section: Chapter Questions

Problem 29CE

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B Corporation, a calendar year-end, accrual basis taxpayer, is owned 75 percent by Bonnie, a cash basis taxpayer. On December 31,2019, the corporation accrues interest of $4,000 on a loan from Bonnie and also accrues a $15,000 bonus to Bonnie. The bonus is paid to Bonnie on February 1,2020; the interest is not paid until 2021 . How much can B Corporation deduct on its 2019 tax return for these two expenses? $0 $4,000 $15,000 $19,000 $12,000
Troy, a cash basis taxpayer, is employed by Eagle Corporation, also a cash basis taxpayer. Tray is a full-time employee of the corporation and receives a salary of 60,000 per year. He also receives a bonus equal to 10% of all collections from diems he serviced during the year. Determine the tax consequences of the following events to the corporation and to Troy: a. On December 31, 2019, Troy was visiting a customer. The customer gave Troy a 10,000 check payable to the corporation for appraisal services Troy performed during 2019. Troy did not deliver the check to the corporation until January 2020. b. The facts are the same as in part (a), except that the corporation is an accrual basis taxpayer and Troy deposited the check on December 31, but the bank did not add the deposit to the corporations account until January 2020. c. The facts are the same as in part (a), except that the customer told Troy to hold the check until January 2020 when the customer could make a bank deposit that would cover the check.

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Jack paid $1,800 in interest for his student loan in 2021. What is the tax treatment of this interest payment? Not deductible because Mary and Jack's AGI exceeds the statutory threshold Deductible on Schedule E Deduction from AGI on Schedule A Deduction for AGI as a business expense