Question

Basic Scenarios 27 Basic Scenario 3:

Henry Howard and Charlotte Criswell Interview Notes

• Henry and Charlotte are both 28 years old.

• Henry and Charlotte separated in 2018 and their divorce was finalized in January 2019. During 2019, Charlotte paid Henry alimony payments of $12,000.

• Charlotte earned $85,000 in wages during 2019. Henry earned $13,000 in wages.

• Henry has two children from a previous relationship. Ethan is 9 and James is 6 years old and they lived with Henry for all of 2019. Ethan and James did not provide over half of their own support.

• Henry paid all the rent, utilities, and household expenses.

• Henry, Charlotte, Ethan, and James are all U.S. citizens with valid Social Security numbers. Basic Scenario 3: Test Questions

5. Which of the following statements is true?

a. Henry must report the $12,000 alimony received as income and Charlotte can claim alimony paid as an adjustment to income.

b. Henry is not required to report the $12,000 alimony received as income and Charlotte cannot claim alimony paid as an adjustment to income.

c. Henry must report the $12,000 alimony received as income and Charlotte cannot claim alimony paid as an adjustment to income.

d. Henry is not required to report the $12,000 alimony received as income and Charlotte can claim alimony paid as an adjustment to income.

6. Who can claim Ethan and James as qualifying children for earned income credit?

a. Charlotte b. Henry c. Both Charlotte and Henry d. Neither Charlotte or Henry 28 Basic

Answer 1

5. b. Henry is not required to report the $12,000 alimony received as income and Charlotte cannot claim alimony paid as an adjustment to income.

6. a. Henry can claim Ethan and James as qualifying children for earned income credit.