Question

Prebuilt chapter 7 Problem 6. John and Tara Smith are married and have lived in the same home for over 20 years. John’s uncle Tim, who is 64 years old, has lived with the Smiths since March of this year. Tim is searching for employment but has been unable to find any—his gross income for the year is $2,000. Tim used all $2,000 toward his own support. The Smiths provided the rest of Tim’s support by providing him with lodging valued at $5,000 and food valued at $2,200.

1. Are the Smith’s able to claim Tim as a dependent?

____Yes

____No

2. Assume the original facts except that Tim earned $10,000 and used all the funds for his own support.

Are the Smith’s able to claim Tim as a dependent?

___ Yes

___ No

3. Assume the original facts except that Tim is a friend of the family and not John’s uncle.

___ Yes

___ No

4. Assume the original facts except that Tim is a friend of the family and not John’s uncle and Tim lived with the Smith’s for the entire year.

___ Yes

___ No

Answer 1

a. Yes. The Smiths may claim Tim as a dependent as a qualifying relative as he meets qualifying relative test and also The Smiths provided more than half of Tim’s support.

b.

No. The Smiths may not claim Tim as a dependent because he is not a qualifying relative and the Smiths did not provide more than half of Tim’s support

c. Assume the original facts except that Tim is a friend of the family and not John's uncle

No. The Smiths may not claim Tim as a dependent because he is not a qualifying relative as he is not a family and does not lived with them entire year.

d. Assume the original facts except that Tim is a friend of the family and not John’s uncle and Tim lived with the Smith’s for the entire year.

Yes. The Smiths may claim Tim as a dependent because he is a qualifying relative. Since in case of relationship, Tim is not related, but he lived with the Smiths for the entire year