Question

In 2018, Elaine paid $2,640 of tuition and $920 for books for her dependent son to attend State University this past fall as a freshman. Elaine files a joint return with her husband.

What is the maximum American opportunity credit that Elaine can claim for the tuition payment and books in each of the following alternative situations?

a. Elaine’s AGI is $83,000.

b. Elaine’s AGI is $170,500.

c. Elaine's AGI is 205,500

Answer 1

A) AGI IS $83000

EXPLANTATION:

DESCRIPTION . AMOUNT . EXPLANATION

1) AOC before phase out $2390 . 2000×100% + (3560-2000)×25%

2) AGI. $83000

3) phase out threshold. $160000

4) excess AGI. $0 . [(2)-(3) but not <0 and not >20000]

5)phase out range for $20000. $180000 - $160000

taxpayer filing as married

filing jointly

6) phase out percentage . 0% . (4)/(5) or 100% max

7) phase out amount . $0 . 1×6

AOC after phase out . $2390

B)

AOC before phase-out $2,390 2,000×100% + (3,560 – 2,000) × 25%(2) AGI $170500

(3) Phase-out threshold 160,000

(4) Excess AGI $10500 [(2)–(3) but not <0 and not >$20,000}

(5) Phase-out range for

taxpayer filing as

marriedfiling jointly $20,000 $180,000 – $160,000

(6) Phase-out percentage 52.5% . (4) / (5) or 100% max

7)phase out amount . 1255 . (1) × (6)

AOC after phase out . $1135

C)

(1)AOC before phase-out $2,390 2,000×100% + (3,560 – 2,000) × 25%

(2) AGI $205500

(3) Phase-out threshold 160,000

(4) Excess AGI $45500 . (2) – (3) {but not <0 and limited to a maximum of $20,000}

(5) Phase-out range for

taxpayer filing as married

filing jointly $20,000 $180,000 – $160,000

(6) Phase-out percentage 100%. (4) / (5) or 100% max

(7) Phase out amount. $2390

(8) .AOC after phase out. $0

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