Question

Interview Notes

Darcy is 45 years old, single, and a U.S. citizen with a valid Social Security number. She had $45,000 in wages.

During the interview with Darcy, you determine the following facts:

Darcy’s son Chris, age 21, is unmarried and was a full-time student working on a degree in accounting during 2017.

Chris’ income was $8,500 in wages, which he used to pay his tuition. He did not provide more than half his own support.

Chris lived on campus during the school year, but came home on breaks and for the summer.

Chris is in his third year of college.

Chris has never had a felony drug conviction.

Chris is a U.S. citizen with a valid Social Security number.

Questions:

1. Who can claim Chris' personal or dependency exemption?

A.            Chris can claim his personal exemption because he had earned income.               

B.            Chris can claim his personal exemption if Darcy does not to claim him.   

C.            Chris does not have a filing requirement so he cannot claim a personal exemption.         

D.            Chris must file a tax return and claim zero personal exemptions because Darcy can claim him as a dependent on her tax return.

2. Darcy can claim the expenses Chris paid as qualifying expenses for the American opportunity credit if Darcy claims Chris as a dependent on her return.       

True

False

Answer 1

Answer 1. To be dependent the following conditions should be met:

• The child can be your son, daughter, stepchild, eligible foster child, brother, sister, half brother, half sister, stepbrother, stepsister, adopted child or an offspring of any of them.
• Your child must be under age 19 or, if a full-time student, under age 24. There is no age limit if your child is permanently and totally disabled.
• Your child must live with you for more than half the year.
• Your child may have a job, but that job cannot provide more than half of her support.

*Chris is independent. because Chris lived on campus during the school year.

A. Chris can claim his personal exemption because he had earned

Answer 2. True

Only qualifying educational expenses can be claimed on income taxes anyway.

if Darcy claims Chris as a dependent on her return.