Question

How much can you deduct for AGI for the following scenarios? Provide explanation for possible partial credit. (only asking how much For AGI deduction can you claim in each scenario, I do not ask for the calculation of AGI)

• Austin is a Graduate student. His gross income for 2020 is $25k from his Research assistant job. Austin pay $18k for his tuition in 2020 from his out-of-pocket money.
• Anna is a non-active, non-managing, partner in AnnaBanana LLC. Her tax basis in the partnership is $10k. Her share of loss from the partnership is $12k.

Allison contribute $4k to her traditional IRA.

Answer 1

For Austin, Total income is 25000$ which is less than 60000$. Hence, he will get deduction of only 2000$ in his tution fees.

Any loss occured in excess of tax basis are disallowed and remaining will be carried forward. So, here, for Anna, 10000$ shall be provided as deduction this year and remaining 2000$ shall be carried forward next year.

Maximum IRA allowed is 6000$ for rebate. Since, Austin contributed only 4000$, he will get the full deduction of 4000$.