Question

Alfred and Lynne Lunt are married and have twin two-year-old daughters. In addition, the couple Alfred and Lynne provide more than half the support of Alfred father, Ivor, who has no income and who lives in a home that the couple maintain in Florida. In addition, Alfred's brother, Bruce, lives with the couple for nine months of the year after moving to the area for a new job, at which he earned $45,000 during 2017.

A. Two B. Three C. Four D. Five E. Six

Answer 1

Three. (which is Option A)

____

Explanation:

In the given case the couple can claim dependancy exemption for the twin two-year-old daughters and Alfred's father. As per the applicable rules, dependency exemption for children can be claimed for if they have lived with the parents for more than half of the year and are under 19 years of age or under 24 years of age for a full time student for the year. Further, the children must not have provided for half of their support for the year.

Further, dependency exemption can be claimed for parents/in-laws/stepparents/siblings if they

1) have gross income of less than $4,050 (for 2017).

2) the taxpayer (s) has/have provided for more than half of the support for the parents/in-laws/steppparents/siblings.

In the given case, even though Ivor has lived at a place (Florida) other than the one in which Alfred and Lynne Lunt reside, the dependency exemption can be claimed for Ivor because the rule which requires a relative to stay with a taxpayer at his/her residence for the entire year is not applicable to parents/in-laws/steppparents/siblings. For Bruce, Alfred and Lynne Lunt cannot claim dependency exemption as Bruce has gross income of more than $4,050 even though he is not required to stay with Alfred and Lynne Lunt for the entire year as per the applicable rules. Also, Alfred and Lynne Lunt have not provided any support to Bruce for the year.