Lionel is an unmarried law student at State University Law School, a qualified educational institution. This year Lionel borrowed $24,000 from County Bank and paid interest of $1,440. 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: (Leave no answer blank. Enter zero if applicable.)Lionel's AGI before deducting interest on higher education loans is $74,000.

The correct answer is $1,056.

Explanation:

According to the scenario, the computation of the given data are as follows:

If AGI is less than $70,000 than maximum deduction = $2,500

Then the second Phase is start at $70,000 and ends at $85,000.

Modified AGI = $74,000

Interest on loan = $1,440

So, we can calculate the amounts Lionel can deduct for interest on higher-education loans by using following formula:

Deduction for Interest = Total interest paid - Amount disallowed

Where, Amount disallowed = ($74,000 - $70,000) ÷ ($85,000 - $70,000) × $1,440

= ($4,000) ÷ ($15,000) × $1,440

= $384

So, by putting the value, we get

Deduction for Interest = $1,440 - $384

= $1,056

cognitive overload: having a lot on your mind impairs decision-making and tends to result in the simplest, but not necessarily best, option being selected.

empathy gaps: overlooking how you might feel in a different situation can result in unnecessary purchases, such as overbuying when shopping for food on an empty stomach.

optimism and overconfidence: wearing rose-tinted glasses and having unrealistic expectations about the future can affect money management and leave you unprepared for a change in circumstance.

instant gratification: seeking instant gratification drives impulsive spending and can undermine long-term planning and savings.

harmful habits: automatic or mindless behaviour can amplify a poor financial decision as it becomes a recurring event.

social norms: we are heavily influenced by the actions of others; while this can be in certain circumstances, it also contributes to the pressure to keep up with the joneses through conspicuous consumption.

a. primarily outdoors, responding to emergencies and protecting people.

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