PERSONAL AND DEPENDENCY EXEMPTIONS;
FILING STATUS; DETERMINATION
OF TAX FOR AN INDIVIDUAL;
SOLUTIONS TO PROBLEM MATERIALS
The personal exemption is a deduction allowed each taxpayer. On a joint return, each of the two taxpayers
(husband and wife) is entitled to a personal exemption deduction. Dependency exemptions are allowed for
each qualifying dependent, whether a qualifying child or other dependent, of the taxpayer. See Question 2
for the definition of a dependent.
The exemption amount for both the personal and dependency exemptions is $3,500 for 2008.
However, a taxpayer who qualifies to be claimed as a dependent on any other taxpayer’s return may not
claim a personal exemption (technically the exemption deduction is zero) on his or her own return. (See
pp. 4-2 and 4-3 and §§ 151 and 152.)
Six requirements must be met.
Relationship test—must be the taxpayer’s child, step-child, or foster child, or a sibling or step-sibling,
or a descendant of any of these. See question 4-3.
Residence test—the qualifying child must have the same place of abode as the taxpayer.
The qualifying child must be under age-19, or under age-24 and a full-time student, or totally and
The child may not have filed a joint return if he or she is married at the end of the year, unless there is
no tax shown on the return.
The child must be a U. S. citizen, resident, or national, or a resident of Canada or Mexico.
The child cannot be self-supporting (i.e., provides more than one-half of his or her own support).
(See pp. 4-3 and 4-3)
The relationship test stipulates that a qualifying child must be the taxpayer’s—
natural, adopted, or foster child,
foster child, or
a sibling or step-sibling,
or a descendant of any of these.
(See p. 4-3.)
C is entitled to the exemption. Since C cannot be claimed by Q, C and Q are otherwise eligible to claim
the exemption for D. Under the tie-breaker rules, the exemption goes to C, since C is a parent of D.
R is entitled to the exemptions for D. E is a qualifying child of R. Since E can be claimed by R, E
cannot claim the exemption for D. Since D is a qualifying child of R, R may claim the exemption.