Samantha, who is single and has MAGI of $28,000, was recently employed by an accounting firm. During the year, she spends $2,500 for a CPA exam review course and begins working on a law degree in night school. Her law school expenses were $4,200 for tuition and $450 for books (which are not a requirement for enrollment in the course). Assuming no reimbursement, how much can Samantha deduct for the:

a. CPA exam review course? $X
b. Law school expenses? $X

a. CPA exam review course $0

b. Law school expenses $4,000

Explanation:

1a. CPA exam review course will be $0 because the IRS has disallowed any costs that will lead to qualifying for a different trade .

1b. The Law School expenses will be $4,000 . Based on section 222, Samantha is been limited to $4,000 of the tuition paid.

Therefore the balance of $650 is excess tuition $200 + $450 books which will not qualify under the regular education expense deduction due to the negative position of the IRS on law school costs.

d. all of the above are true.