16. Amy is single and works part-time at a local company. During the year, she paid $3,800 in tuition and fees to enroll in classes at the local community college. This was her second year attending college to work toward her bachelors degree. She purchased her course materials from a friend for $300. She had not been convicted of a felony for possessing or distributing a controlled substance at the end of 2018. Her modified adjusted gross income (MAGI) is $38,000. Assuming she otherwise qualifies, which education credit best benefits Amy and what amount of credit is she entitled to claim?

    a) Lifetime Learning Credit: $820 b) Lifetime Learning Credit: $760 c) American Opportunity Credit: $2,450 d) American Opportunity Credit: $2,500

20. Alicias 18-year-old son is a freshman at a local college. She paid the required tuition and fees for her son and received a Form 1098-T. She is wondering whether she is eligible to claim an education credit on her 2018 tax return. Which of the following statements is correct?

    a) The Lifetime Learning Credit offers a higher maximum credit amount than the American Opportunity Credit b) The phase-out amount based on the taxpayers AGI for the Lifetime Learning Credit is greater than for the American Opportunity Credit. c) Both the American Opportunity Credit and the Lifetime Learning Credit are nonrefundable tax credits. d) If the student has been convicted of a felony for possessing or distributing a controlled substance as of the end of 2018, he is not eligible for the American Opportunity Credit.

21. Shelly, single, is a full-time elementary school teacher. She is interested in learning the basics of information technology to improve her current job skills and enrolled in a couple of IT courses at the local college. Shelly paid $3,500 for tuition and fees and $300 for textbooks from a local bookstore (not required by the institution). She received a Form 1098-T. Her AGI is $56,000 and her tax liability on Form 1040, line 11 is $5,625. Shelly has never been convicted of a felony for possessing or distributing a controlled substance. Which education credit is Shelly eligible to claim and for what amount?

    a) American Opportunity Credit; $2,375 b) American Opportunity Credit; $2,450 c) Lifetime Learning Credit; $700 d) Lifetime Learning Credit; $760
22. Joshua is a 25-year-old graduate school student who paid $15,000 in tuition and fees to an eligible educational institution in 2018. He received a Form 1098-T. Joshua works part-time at a local firm and had wages of $22,500. He has no other income or nonrefundable tax credits. His tax liability on Form 1040, line 11 is $1,073. What is the amount of his education credit for 2018? a) $3,000 b) $2,000 c) $1,073 d) $2,500

23. The Browns are both managers and file jointly with a modified AGI of $166,000. Their dependent son, Gary, is a full-time college student. During tax year 2018, they paid $10,500 in qualifying education expenses for Garys second year of college. On their tax return, how will the Browns claim the tax benefit for Garys education expenses?

    a) They are not eligible to claim a tax benefit for the education expenses. b) They can claim the Lifetime Learning Credit. c) They can claim the American Opportunity Credit. d) They can claim an adjustment to income.