Question

Kyle and Liza are married and under 65 years of age. During 2019, they furnish more than half of the support of their 19-year old daughter, Kendra, who lives with them. She graduated from high school in May 2018. Kendra earns $15,000 from a part-time job, most of which she sets aside for future college expenses. Kyle and Liza also provide more than half of the support of Kyle’s cousin who lives with them. Liza’s father, who died on January 3, 2019, at age 90, has for many years qualified as their dependent. How many dependents can Kyle and Liza claim?

a.one

b.two

c.three

d.none

Answer 1

b.two

Publication 501 of IRS deals with dependents explaining the tests to be conducted for being qualifying child or relative.

Here, three persons namely Kendra, kyle’s cousin and Liza’s father has to be dealt with.

The dependents include qualifying child or relative.

Kendra is daughter of Kyle and Liza.

To be qualifying child,

• The child must be daughter, which Kendra is ,
• the child must not have provided more than half support. Here, parents have provided more than half support , so, this box is also ticked.
• The child must be younger than 19 at the end of the year and younger than 24 as a student at the end of the year. Here, Kendra does not qualify as she is not younger than 19 and also not a student to be counted under second condition.

Hence, Kendra is not qualifying child.

If Kendra is not a qualifying child, she can be tested under the qualifying relative test. As such the income is greater than $ 4,150 she fails the gross income test to be qualifying relative.

Thus, Kendra is not dependent for tax purpose.

Kyle’s cousin obviously is not qualifying child. However, he qualifies as relative being a member of household assuming all other conditions satisfied. Hence, Kyle’s cousin is dependent.

Liza’s father already has been qualified as their dependent upto the time of death and hence, liza’s father can be claimed as dependent for the year upto that point.

Thus, Kyle’s cousin and Liza’s father are only dependents.

The correct option is b. two

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