Solution and Explanation:
As per the income tax, if the income of a single taxpayer lies in the range of $65000 and $80000, the taxpayer is elgibile for a prtial deduction on his/her education on loan interest.
The partial interest deduction amount is calculated as follows:
Partial interest deduction allowed = [tex]\text { Interest expense } *(\$ 80000-\mathrm{AGI} / \$ 80000-\$ 65000)[/tex]
[tex]=\$ 1200 *(\$ 80000-\mathrm{AGI} / \$ 80000-\$ 65000)[/tex]
[tex]=\$ 1200 * \{(580000-\$ 76000 / \$ 80000-\$ 65000)}[/tex]
[tex]=\$ 1200 * \$ 4000 / \$ 15000[/tex]
= $320
Therefore, the allowed interest deduction in this case is $320.
