Tax Assignment 2

Tax Assignment 2 - Shu-Ya Peng Tax Assignment 2 Explanation...

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Shu-Ya Peng Tax Assignment 2 Explanation 1: Clark and Lois Kent can claim both May & Billy, Jr., as dependent because of the qualifying child test. They meet the relationship test because they are Lois’s children, they meet the Abode Test because they live with the Kent’s for more than 9 months a year. They meet the age test because they are7 and 10 years old, respectfully. They are not self supporting. Under the Tiebreaker rules, when both persons are the parents, and the child lives longer with one parent, the parent with the longer period of residence can claim exemption. Because the children live with the Kent’s for 9 month, while only live with Billy Batson for 3 month, Clark and Lois Kent get the exemptions. Explanation 2: Lucy Lane is a qualifying relative. She meets relationship test. She meets gross income test because her only income is social security benefit, which is lower than the first base of $25,000.
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Unformatted text preview: For the support test, the $2,500 count toward her own support , yet the Kent provide $3,500 support and rent of $450 *12 = 5,400. Because Kent provide more than half the support, she meet the support test as well and can be claimed as a dependent. Explanation 3 Medical Expenses include hospital stay for poisoning, surgery after accident, doctor visits, prescriptions, premiums for insurance and another surgery Billy received. The amount then needs to deduct the reimbursement. Also, the expected reimbursement next year is disregarded in measuring the amount of the deduction. The calculation =3000+3270+850+380+850+2600-2000+1200 = 10150 10150 goes to line 1 on Schedule A Explanation 4 Casualty or theft losses Please see Form 4684 in the attachment....
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  • Spring '09
  • GeneralAccounting
  • Accounting, Lois Lane, Gross Income Test, relationship test, Lois Kent, Peng Tax Assignment

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