Question

This is for 2020

This year Jack intends to file a married-joint return. Jack received $172,500 of salary and paid $5,000 of interest on loans used to pay qualified tuition costs for his dependent daughter, Deb. This year Jack has also paid moving expenses of $4,300 and $28,300 of alimony to his ex-wife, Diane, who divorced him in 2012. (Round your intermediate calculations and final answer to the nearest whole dollar amount.)

a. What is Jack's adjusted gross income?

Answer 1

Based on the information available in the question, we can answer as follows:-

Particulars	Amount
Salary	172,500
Less:-
Alimony	(28,300)
Modified AGI	144,200
Less:- Student loan interest	(2,150)
Adjusted Gross Income	142,050

Per IRS, the deduction for student loan interest is limited to the lesser of :-

$2,500

or

The actual amount paid for qualified tuition expenses.

Further, the Adjusted gross income is phased out for income in excess of $140,000. The amount of interest that is phased out for Jack is calculated as follows:-

$2,500 * $4,200/$30,000 = $350

The eligible student loan interest is $2,500 - $350 = $2,150

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