# Student Loan Case Study

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43. What are some of the limitations concerning deductibility of student loan interest? Be specific and comprehensive. The loan must be from a bank or lending facility, only the student may take the deduction, if they are claimed as a dependent they cannot take the deduction, the amount of the deduction is limited to 2,500. Only the interest paid in the current tax year is deductible. 48. In May 2010 Maria graduated from the University of San Diego with a degree in accounting and moved to Denver to look for work. Shortly after arriving in Denver, she obtained work as a staff accountant in a local CPA firm. In her move to Denver, Maria incurred the following costs: \$450 in gasoline \$250 for renting a truck from UPAYME rentals \$100 for a…show more content…
Mickey is a 12-year old dialysis patient. Three times a week he and his mother, Sue, drive 20 miles one way to Mickey’s dialysis clinic. On the way home they go 10 miles out of their way to stop at Mickey’s favorite restaurant. Their total round trip is 50 miles per day. How many of those miles, if any, can Sue use to calculate an itemized deduction for transportation? Use the mileage rate in effect for 2010. Explain your answer. To calculate her deduction Sue would only use the miles 40 necessary to take Mickey to dialysis, not the additional 10 to eat at his favorite restaurant. 40 miles * 16.5¢/mile=\$6.60 per trip * 3 trips/wk=\$19.80/wk * 52wks/yr=\$1029.60 per year in tax deductible transportation costs. 52. On April 1, 2010, Paul sold a house to Amy. The property tax on the house, which is based on a calendar year, was due September 1, 2010. Amy paid the full amount of property tax of \$2,500. Calculate both Paul and Amy’s allowable deductions for the property tax. Assume a 365 day year. Paul lived at the property for 90 days from January 1 to April 1, than Amy lived there for 275 days from April 2 to December 31. Paul is eligible for a deduction of \$616 of the property tax (2500*365/90) = 616.43. Amy is allowed a deduction of \$1884 of the property tax (2500*275/365) =