1A

Hardaway earned $115,500 of compensation this year. He also paid (or had paid for him) $3,050 of health insurance (not through an exchange).

What is Hardaway's AGI in each of the following situations? (Ignore the effects of Social Security and self-employment taxes.)

a. Hardaway is an employee, and his employer paid Hardaway's $3,050 of health insurance for him as a nontaxable fringe benefit. Consequently, Hardaway received $112,450 of taxable compensation and $3,050 of nontaxable compensation.

1B

Lionel is an unmarried law student at State University Law School, a qualified educational institution. This year Lionel borrowed $29,000 from County Bank and paid interest of $1,740. Lionel used the loan proceeds to pay his law school tuition. Calculate the amounts Lionel can deduct for interest on higher-education loans under the following circumstances:

Note: Leave no answer blank. Enter zero if applicable.

a. Lionel's AGI before deducting interest on higher-education loans is $50,000.

b. Lionel's AGI before deducting interest on higher-education loans is $79,000

c. Lionel's AGI before deducting interest on higher-education loans is $90,000.