How much of the payments will avery be able to claim

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Reference no: EM132665507

Problem 1: Joseph cashed in a CD (certificate of deposit) early because he needed money quickly to buy a new car. Unfortunately, the bank charged him an early withdrawal penalty of 5% which amounted to $250. Can Joseph deduct the penalty on his taxes and, if so, how much can be deducted?

Select one:

a. No, Joseph will not be allowed to deduct any of the early withdrawal penalty.

b. Yes, Joseph can deduct $250 on line 17 of Schedule 1 (Form 1040) as an adjustment to income.

c. Yes, but only half of the early withdrawal penalty may be deducted.

d. Yes, but Joseph can only deduct the early withdrawal penalty if he uses Schedule A and itemizes his deductions.

Problem 2: Avery and Jenna divorced in December 2017. Avery was ordered by the court to pay Jenna $750 each month for child support and $250 each month in alimony. He made the payments for the entire year. How much of the payments will Avery be able to claim as a deduction when he files his 2019 tax return?

Select one:

a. $12,000

b. $ 3,000

c. $ 0

d. $ 9,000

Reference no: EM132665507

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