PERSONAL AND DEPENDENCY EXEMPTIONS;
FILING STATUS; DETERMINATION
OF TAX FOR AN INDIVIDUAL;
SOLUTIONS TO PROBLEM MATERIALS
4-1 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.)
4-2 Six requirements must be met.
1. 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.
2. Residence test—the qualifying child must have the same place of abode as the taxpayer.
3. The qualifying child must be under age-19, or under age-24 and a full-time student, or totally and
4. 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.
5. The child must be a U. S. citizen, resident, or national, or a resident of Canada or Mexico.
6. The child cannot be self-supporting (i.e., provides more than one-half of his or her own support).
(See pp. 4-3 and 4-4)
4-3 The relationship test stipulates that a qualifying child must be the taxpayer’s—
_ natural, adopted, or foster child,
_ step-child, or
_ foster child, or
_ a sibling or step-sibling,
_ or a descendant of any of these.
(See p. 4-3.)
4-4 a. 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.
b. 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.
c. S is entitled to the exemption for D. F is not a qualifying child of S, but she may be claimed under the
rules for other dependents. Since F can be claimed by S, F cannot claim an exemption for D. Since D is
a qualifying child of S, S can claim the exemption for D.
(See pp. 4-3 to 4-12.)
4-5 All five of the tests below must be met in order for a taxpayer to be entitled to an exemption for a dependent.
_ Support test. The taxpayer must provide more than 50 percent of the qualifying individual’s total support.