Ch3Solutions

Ch3Solutions - CHAPTER 3 TAX DETERMINATION; PERSONAL AND...

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CHAPTER 3 TAX DETERMINATION; PERSONAL AND DEPENDENCY EXEMPTIONS; AN OVERVIEW OF PROPERTY TRANSACTIONS SOLUTIONS TO ASSIGNED PROBLEMS 9. a. The non-filing spouse has no gross income and is not claimed as a dependent of another taxpayer. b. Yes, it would matter. Barring some special agreement between the parties, one-half of the filing spouse’s income would be assignable to the non-working spouse. This will make the no-income requirement impossible to meet. p. 3-11 10. To be a qualifying child, one of her daughters must be a full-time student (under age 24) or disabled. The other daughter is not, and being over age 19 is not a qualifying child. She does, however, satisfy the qualifying relative test which has no age limitation. Concept Summary 3-1 12. An ex-spouse can qualify as a dependent by being a member of the taxpayer’s household in any year other than that of the divorce and only if the relationship does not violate state law. Former in-laws, however, can be dependents under the regular qualifying relative rules. p. 3-14 19. a. Head of household filing status is available since only one parent needs to qualify as a dependent. b. Head of household filing status is available since the son is a dependent under the qualifying child category. c. Head of household filing status is not available. Due to the age test, the son is not a qualifying child. (It is assumed that the son is not disabled or a full-time student.) Due to the gross income test, the son does not satisfy the requirements of a qualifying relative. d. Head of household filing status is not available. The daughter is not a member of taxpayer’s household. pp. 3-30 and 3-31 20. a. Head of household filing status is not available. b. Head of household filing status is not available. 3-1
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3-2 2009 Individual Volume/Solutions Manual c. Head of household filing status is available. d. In c., Florence qualifies as a surviving spouse. She does not in a. and b. because Derrick is not her dependent. p. 3-31 and Example 41 21. If Fran maintains a household for a dependent child, she probably qualifies as an abandoned spouse. If so, Fran can file as a head of household. pp. 3-31 and 3-32 27. Under a multiple support agreement, Erica should claim her mother as a dependent. As part of the contribution toward support, Erica should pay for any medical expenses her mother incurs. With her children and because her brothers do not itemize, Erica is the party most likely to obtain a tax benefit from her mother’s medical expenses. However, if Erica receives no benefit from a medical expense deduction (due to 7.5% of AGI limit), then the
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Ch3Solutions - CHAPTER 3 TAX DETERMINATION; PERSONAL AND...

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