Lou and Stella North are married, file a joint return, and have two dependent children in college, Phil and Jaci. Phil attends a State University in a neighboring state, and Jaci attends a State University in their home state. Neither receives any type of financial assistance. The Norths€™ modified AGI in 2016 is $112,000. The children€™s classifications and expenses are as follows:

a. Compute any education credits that the Norths may claim in 2016.
b. How would your answer in Part a change if Phil received an academic scholarship of $3,000 (excluded from gross income) for each semester in 2016?
c. How would your answer in Part a change if Lou and Stella€™s modified AGI for 2016 was $175,000?
d. How would your answer in Part a change if Phil had been a junior during Spring semester 2016 and a senior during Fall semester 2016?

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Spring Semester 2016 (paid in January 2016) Fall Semester 2016 (paid in July 2016) Master's candidate $8,000 500 Phil: Tuition Laboratory fees Student activity fees Course materials (books) Room and board Senior $7,500 500 100 100 400 450 3,200 3,200 Sophomore $1,600 100 250 3,500 Junior $1,750 Jaci: Tuition Student activity fees Course materials (books) Room and board 100 300 3,700