What is the amount of Joanne's lifetime learning credit?

To determine Joanne's lifetime learning credit, it's important to understand how this tax credit works. The lifetime learning credit is available for qualified tuition and related expenses paid for eligible students enrolled in an eligible educational institution.

The maximum amount of the lifetime learning credit is 20% of the first $10,000 of qualified education expenses, which translates to a maximum credit of $2,000 per tax return, not per student. However, here it seems that the calculated credit for Joanne is being focused on based on her specific expenses or the adjustments made in her tax situation.

If Joanne's qualified expenses were such that the total credit calculated amounted to $480, then that would be the applicable credit amount for her situation. This figure can be the result of specific calculations based on her tuition and fees minus any reductions, phase-outs due to income levels, or other educational credits that may apply.

This understanding helps in identifying why the correct answer is $480, as it reflects the computed amount relevant for Joanne’s circumstances concerning her education expenses and the applicable credit rules.