Additional Examples from Class (2-2-2016)

Additional Examples from Class (2-2-2016) - She has $10,000...

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Additional Examples from Class (2/2) Marcie, a full-time student, is 25 and lives away from home while attending college. Marcie earned $3,500 from babysitting, but her parents paid for more than half of her support. Can Marcie’s pa rents claim her as a dependent? Yes, Marcie qualifies as a qualifying relative (she is too old to qualify as a qualifying child). Relationship yes, daughter (does not have to live with them) Support yes, parents provide more than half of support Gross income yes, gross income ($3,500) is less than the personal exemption amount Katie’s grandmother lives in an assisted living facility.
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Unformatted text preview: She has $10,000 of tax-exempt interest income during the year, but due to the cost of her medical expenses, Katie pays for more than half of her costs of living. Can Katie claim her grandmother as a dependent? Yes, Katie’s grandmother qualifies as a qualifying relative (ancestors cannot qualify as qualifying children). Relationship yes, grandmother (does not have to live with Katie) Support yes, Katie provides more than half of support Gross income yes, gross income ($0) is less than the personal exemption amount (tax-exempt interest is excluded from gross income calculation)...
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