Question

During 2010, Al, his daughter and son (both adults), and his grandchild Candy, the minor child of his daughter, all resided in Al’s home.

Al’s son filed his 2010 Federal income tax return on February 28, 2011. On that return, the son claimed a personal exemption deduction for himself. He also claimed $1,129 in refundable tax credits and $75 withheld tax, resulting in a refund of $1,204.

Al’s daughter also filed her 2010 Federal income tax return on February 28, 2011. She reported gross income of $11,892 and claimed a personal exemption deduction for herself and a dependent exemption deduction for Candy(her daughter and Al’s granddaughter). The daughter also claimed $4,450 in refundable credits and $840 withheld tax, resulting in a refund of $5,290.

Al applied for and was granted an extension of time to file his 2010 return (due April 15, 2011) which he timely filed on May 23, 2011. On his tax return, Al:

claimed head of household filing status

claimed dependency exemption deductions for his son, his daughter, and his granddaughter (Candy).

Questions

What are the requirements for claiming dependent(s)

Explain whether Al met the requirements to the claim the 3 depends (Daughter, son & granddaughter) on his tax return

Is the head of household filing status claimed by Al appropriate? Explain

Answer 1

Requirements for claiming dependents

Rules for All Dependents

Dependents usually include a child or other relative. Qualifying children and qualifying relatives have other additional requirements, but these requirements should be fulfilled by all:
Dependents can have their own tax returns, and even be married, but they must not have filed a joint tax return for the year unless it’s just to claim a refund.
They must be a U.S. citizen, U.S. national, or a resident alien.
They must have a taxpayer identification number. That’s usually a Social Security Number, but if the child doesn’t qualify for one, it can be an Individual Taxpayer Identification Number (ITIN) or an Adoption Taxpayer Identification Number (ATIN).

Rules for Claiming Children

When you’re claiming a child as a dependent these further requirements should be met:
The child has to have lived with you for half of the year or more.
The child has to be related to you as a son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, or a descendant of any of those.
The child must be 18 years or less at the end of the year, or less than 24 years if a student. Again, to be a student, the child must have attended full time school at least five months of the year in total.
The child must be younger than you (or your spouse, where married filing jointly), unless the child is disabled.

Rules for Claiming Other Relatives and Unrelated Persons

For claiming a parent or other relative as a dependent, these additional requirements should be met:
The person cannot have a gross yearly income over $4,050 for the year 2017.
The person can’t be a qualifying child dependent of you or any another person. That means if somebody else can claim the person as a qualifying dependent, you can’t claim the same person.
The person must be either related to you or must have lived with you all year as a member of your household.

Whether AI met the requirements of claiming 3 dependents:

Daughter - Cannot be claimed as children since more than 18 years old and cannot be claimed as other relative since gross income is more than $4,050

Grandchild - Cannot be claimed as qualifying relative since the grandchild is already claimed as a qualifying child by AI''s daughter. Cannot be claimed by AI again.

Son - Cannot be claimed as qualifying child since more than 18 years old and does not seem to be a student since he has some amount of withheld tax means he is earning something (student information and exact age information is missing. Hence assumed not a student under 24 years). But son can be claimed as a qualifying relative (assuming gross yearly income is under $4,050)

Explanation if claiming head of household filing status appropriate or not

AI can be 'considered unamarried' for the purpose of claiming head of househld status since with the given information the following is evident and all requirements are met:

A separate return was filed from your spouse.
Provided more than half the cost of maintaining your home for the tax year.
His home was the principal place of abode for you and your dependent son, daughter, or eligible foster child (that meets the qualifying child or qualifying relative tests to be claimed as your dependent) for more than half the tax year.
The spouse did not live in the home at any time during the last six months of the tax year.

AI paid for more than half 50% of the cost of keeping up a home. With the given information it looks like AI incurred all the costs associated with the household, or atleast more than 50% of the costs were borne by AI

He has maintained a qualifying child or qualifying relative who has lived for more than half of the year with him. His son meets the requirement of a qualifying relative who has lived for more than half the year with him.

Hence the filing status of House of household seems correct to me.