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Dependency Exemptions on Federal Tax Return

I need some help with this problem:
John and Carole file a joint return in 2007 and have three children:
Jack, age 23; David, age 20; and Kristen, age 15. All three children live at home the entire year. Below is information about each of the children:
? Jack: graduated from college in December 2006 and is going to medical school beginning in July 2008. In 2007, Jack worked sparingly as he studied for the medical school entrance exam, but did earn $3,500. John and Carole provided 80% of Jack's support during the year.
? David: a full-time student at State U. in 2007, earned $6,400 from a part-time job, and provided 40% of his own support.
? Kristen: a full-time student in high school, had no gross income, and provided none of her own support.
a. Based on the above facts, which of the children can be claimed by John and Carole in 2007?
b. How would your answer to Part a change if Jack began medical school in July?
c. How would your answer to Part a change if Jack earned $3,000 rather than $3,500 in 2007?
d. How would your answer to Part a change if David was a part-time student rather than a full-time student in 2007?
e. How would your answer to Part a change if David provided 60% of his own support rather than 40%?

Solution Preview

A. John and Carol can claim Jack as long as he was their son, was under the age of 24, lived with John and Carol for more than half of the year and they provided over half of his support for 2007 and was a full time student; David could also be claimed due to the same reasons as Jack. Kristen is also a qualifying child and may be claimed on their tax return as she meets all the criteria as well. They are all qualifying children and considered dependents as they meet all the criteria.

B. It would not ...

Solution Summary

This solution discusses scenarios related to how dependancy exemptions are used on a federal joint tax return. Approximately 300 words and 1 reference.

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