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Unformatted text preview: John Kilzi Special Project 1 TAX4001 – U01 – Income Tax Accounting September 14, 2009 Prof. Andrew M. Sbaraglia Ph.D. Research Problem 2: (Page 2-41) Du ring 2008, F rank lived with and supported a 20-year-old woman who was not his wife. He resides in a state that has a statute that makes it a misdemeanor for a man and woman who are not mar ried to each other to live together. May F rank claim his friend as a dependent assuming he satisfies the normal tax r ules for the deduction? Should F rank consider moving to another state? Frank may not claim his friend as a dependent assuming he satisfies the normal tax rules for the deduction. Since Frank lives in a state that has a statute that makes it a misdemeanor for a man and woman who are not married to each other to live together, he is in violation of local law. Both §152(f)(3) and Reg. §1.152-1(b) state that “an individual is not a member of the taxpayer’s household if at any time during the taxable year of the taxpayer the relationship between such...
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- Spring '10
- Accounting, Taxation in the United States, local law, normal tax rules