Chapter 4 Homework Solutions(1)

Chapter 4 Homework Solutions(1) - Chapter 4 Personal and...

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Chapter 4 Personal and Dependency Exemptions; Filing Status; Determination of Tax for an Individual; Filing Requirements Solutions to Problem Materials 4-38 a. M, the custodial parent, is entitled to the exemption. b. M, the custodial parent, is entitled to the exemption. c. F, becauseMthecustodialparentsignedform8332grantingthedependency exemeptiontoth 4-39 a. Head of household with a standard deduction of $8,500 in 2011. For 2008 M could file a final joint return with her husband who died during the year. For 2009 and 2010 she could have filed as a surviving spouse using the schedule for married persons filing jointly. A taxpayer qualifies as a surviving spouse if (1) his or her spouse died within two taxable years preceding the current year and (2) he or she provided a home for a dependent child (ignoring the gross income and joint return tests). For 2011, the best available filing status is head of household. A taxpayer qualifies as head of household if he or she is not married, does not qualify as a surviving spouse and provides more than one- half of the cost of maintaining his or her home as household that is the principal place of abode for more than one-half the year of a qualifying child or a dependent familial relative. For this purpose, a parent must be a dependent but need not live in the taxpayer's home. However the taxpayer still must pay more than half of the cost of keeping up a home for his or her mother or father. Similarly, a child of the taxpayer need not be a dependent. In addition, the individual cannot be a dependent because of a multiple support agreement. (See pp. 4-16 and 4-17.) b. Single and standard deduction in 2011 of $5,800. S would qualify as a head of household if he were entitled to the dependency exemption for his mother outright, rather than through a multiple support agreement. (See Exhibit 4.3 and pp. 4-17 and 4-18.) It may seem strange that S paid over half the cost of providing the home in which his mother lived, yet failed to provide over one-half the cost of her total support. This is entirely possible. Perhaps the siblings paid for medical care or
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This document was uploaded on 11/03/2011 for the course ACCOUNTING 415 at Rutgers.

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Chapter 4 Homework Solutions(1) - Chapter 4 Personal and...

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