Which of the following is a true statement?
A)For purposes of the deduction for educational interest, expenses do not include expenses for room, board, and travel
B)For purposes of the deduction for educational interest, qualified education expenses are those paid for the education of the taxpayer, the taxpayer's spouse, or the taxpayer's dependent
C)The maximum deduction for interest expense on qualified education loans is $6,000
D)A penalty paid for prematurely withdrawing a certificate of deposit or similar deposit is deductible from AGI as an investment expense
E)All of these choices are false.

Question

Quizplus · Accepted Answer

This is the only statement that is true. The deduction for educational interest is limited to interest paid on qualified education loans, and qualified education expenses are those paid for the education of the taxpayer, the taxpayer's spouse, or the taxpayer's dependent. Statement A is false because expenses for room, board, and travel are generally not qualified education expenses. Statement C is false because the maximum deduction for interest expense on qualified education loans is $2,500. Statement D is false because penalties for prematurely withdrawing a certificate of deposit or similar deposit are not deductible as investment expenses. Therefore, the correct answer is B.

Which of the Following Is a True Statement