Question

29. Determine the number of dependents in each of the following independent situations. based on 2018 laws.

1. Leo and Amanda (ages 48 and 46, respectively) are married and furnish more than 50% of the support of their two children, Elton (age 18) and Trista (age 24). During the year, Elton earn5 $4,500 providing transportation for elderly persons with disabilities, and Trista receives a $5,000 scholarship for tuition at the law school she attends. 

2.   Audrey (age 45) is divorced this year. She maintains a household in w hich she, her ex-husband, Clint, and his mother, Olive, live. Audrey furnishes more than 50% of the household's support. Olive is age 91 and blind. 

3. Crystal, age 45, furnishes more than 50% of the support of her married son, Andy (age 18), and his wife, Paige (age 19), who live with her. During the year, Andy earned $8,400 from a part-time job. All parties live in Iowa (a common law state). 

4. Assume the same facts as in part (c), except that all parties live in Washington (a community property state). 


Answer 1

Answer

Answer a) Four = Two personal and two dependency exemptions.
Reason:- Elton is a qualifying child, so his gross income does not matter. Trista is not a qualifying child – although a full-time student, she is not under age 24. However, Trista fits under the qualifying relative category. She passes the gross income test because the tuition portion ofa scholarship is nontaxable.

Answer b) Two = one personal exemption and one dependency exemptions.
Reason :- Clint cannot qualify as a member of Audry’s household in the year of the divorce. Olive meets the relationship test.

Answer C) Three = One personal and two dependency exemption.
Reason :- Andy is a qualified child who is under 19 age, he is not subject to gross income test. Paige who live in Iowa which is common law state that did not have income - splitting option, meet the gross income requirements of a qualifying relative.

Answer d) Two = one personal and one dependency exemptions.
Reason :- Andy is a qualified child who is under 19 age. In a community property situation, however, Paige is treated as having a gross income. Thus, she does not meet the gross income test and cannot be a qualifying relative