Question & Answer

In each of the following independent cases, determine the taxpayer’s filing status and the number of dependents the taxpayer is allowed to claim.

In each of the following independent situations, determine the taxpayer’s filing status and the number of dependents the taxpayer is allowed to claim.

Horatio and Kelly were divorced at the end of last year. Neither Horatio nor Kelly remarried during the current year and Horatio moved out of state. Determine the filing status of Horatio and Kelly for the current year in the following independent situations:

Kano and his wife, Hoshi, have been married for 10 years and have two children under the age of 12. The couple has been living apart for the last two years and both children live with Kano. Kano has provided all the means necessary to support himself and his children. Kano and Hoshi do not file a joint return.

Elroy, who is single, has taken over the care of his mother Irene in her old age. Elroy pays the bills relating to Irene’s home. He also buys all her groceries and provides the rest of her support. Irene has no gross income.

Gary and Lakesha were married on December 31 last year. They are now preparing their taxes for the April 15 deadline and are unsure of their filing status. 

Juan and Bonita are married and have two dependent children living at home. This year, Juan is killed in an avalanche while skiing. 

Ray Albertson is 72 years old and lives by himself in an apartment in Salt Lake City. Ray’s gross income for the year is $3,000. Ray’s support is provided as follows: himself (9 percent), his daughters Diane (20 percent) and Karen (15 percent), his sons Mike (20 percent) and Kenneth (10 percent), his friend Milt (14 percent), and his cousin Henry (12 percent). 

Lee is 30 years old and single. Lee paid all the costs of maintaining his household for the entire year. Determine Lee’s filing status in each of the following alternative situations:

a. Lee is Ashton’s uncle. Ashton is 15 years old and has gross income of $6,000. Ashton lived in Lee’s home from April 1 through the end of the year.

b. Lee is Ashton’s uncle. Ashton is 20 years old, is not a full-time student, and has gross income of $7,000. Ashton lived in Lee’s home from April 1 through the end of the year.

c. Lee is Ashton’s uncle. Ashton is 22 years old and was a full-time student from January through April. Ashton’s gross income was $6,000. Ashton lived in Lee’s home from April 1 through the end of the year.

d. Lee is Ashton’s cousin. Ashton is 18 years old, has gross income of $3,000, and is not a full-time student. Ashton lived in Lee’s home from April 1 through the end of the year.

e. Lee and Ashton are cousins. Ashton is 18 years old, has gross income of $3,000, and is not a full-time student. Ashton lived in Lee’s home for the entire year.

Lacy is divorced and the custodial parent of a three-year-old girl named Bailey. Lacy and Bailey live with Lacy’s parents, who pay all the costs of maintaining the household (such as mortgage, property taxes, and food). Lacy pays for Bailey’s clothing, entertainment, and health insurance costs. These costs comprised only a small part of the total costs of maintaining the household. Lacy does not qualify as her parents’ dependent.

Mel and Cindy Gibson’s 12-year-old daughter Rachel was abducted on her way home from school on March 15, 2024. Police reports indicated that a stranger had physically dragged Rachel into a waiting car and sped away. Everyone hoped that the kidnapper and Rachel would be located quickly. However, as of the end of the year, Rachel was still missing. The police were still pursuing several promising leads and had every reason to believe that Rachel was still alive. In 2025, Rachel was returned safely to her parents.

a. Are the Gibsons allowed to claim Rachel as a dependent in 2024 even though she only lived in the Gibson’s home for two-and-one-half months? Explain and cite your authority.

Dean Kastner is 78 years old and lives by himself in an apartment in Chicago. Dean’s gross income for the year is $2,500. Dean’s support is provided as follows: himself (5 percent), his daughters Camille (25 percent) and Rachel (30 percent), his son Zander (5 percent), his friend Frankie (15 percent), and his niece Sharon (20 percent). 

a. Absent a multiple support agreement, of the parties mentioned in the problem, who may claim Dean as a dependent?

Jamel and Jennifer have been married 30 years and have filed a joint return every year of their marriage. Their three daughters, Jade, Lindsay, and Abbi are ages 12, 17, and 22 respectively, and all live at home. None of the daughters provides more than half of her own support. Abbi is a full-time student at a local university and does not have any gross income. 

a. Which, if any, of the daughters qualify as dependents of Jamel and Jennifer?

Francine’s mother Donna and her father Darren separated and divorced in September of this year. Francine lived with both parents until the separation. Francine does not provide more than half of her own support. Francine is 15 years old at the end of the year. 

a. Is Francine a qualifying child to Donna? 

John and Tara Smith are married and have lived in the same home for over 20 years. John’s uncle Tim, who is 64 years old, has lived with the Smiths since March of this year. Tim is searching for employment but has been unable to find any—his gross income for the year is $2,000. Tim used all $2,000 toward his own support. The Smiths provided the rest of Tim’s support by providing him with lodging valued at $5,000 and food valued at $2,200. 

a. Are the Smiths able to claim Tim as a dependent?

The Samsons are trying to determine whether they can claim their 22-year-old adopted son, Jason, as a dependent. Jason is currently a full-time student at an out-of-state university. Jason lived in his parents’ home for three months of the year, and he was away at school for the rest of the year. He received $9,500 in scholarships this year for his outstanding academic performance and earned $4,800 of income working a part-time job during the year. The Samsons paid a total of $5,000 to support Jason while he was away at college. Jason used the scholarship, the earnings from the part-time job, and the money from the Samsons as his only sources of support.

Can the Samsons claim Jason as their dependent?

Aishwarya’s husband passed away in 2023. She needs to determine whether Jasmine, her 17-year-old stepdaughter who is single, qualifies as her dependent in 2024. Jasmine is a resident but not a citizen of the United States. She lived in Aishwarya’s home from June 15 through December 31, 2024. Aishwarya provided more than half of Jasmine’s support for 2024.

Rank the following three single taxpayers in order of the magnitude of taxable income (from lowest to highest) and explain your results. Assume none of the taxpayers contributed to charity this year.

Nitai, who is single and has no dependents, was planning on spending the weekend repairing his car. On Friday, Nitai’s employer called and offered him $500 in overtime pay if he would agree to work over the weekend. Nitai could get his car repaired over the weekend at Autofix for $400. If Nitai works over the weekend, he will have to pay the $400 to have his car repaired, but he will earn $500. Assume Nitai’s marginal tax rate is 12 percent. 

Through November, Cameron has received gross income of $120,000. For December, Cameron is considering whether to accept one more work engagement for the year. Engagement 1 will generate $7,000 of revenue at a cost to Cameron of $3,000, which is deductible for AGI. In contrast, engagement 2 will generate $5,000 of qualified business income (QBI), which is eligible for the 20 percent QBI deduction. Cameron files as a single taxpayer. 

Ekiya, who is single, has been offered a position as a city landscape consultant. The position pays $125,000 in wages. Assume Ekiya has no dependents. Ekiya deducts the standard deduction instead of itemized deductions, she is not eligible for the qualified business income deduction.

a. What is the amount of Ekiya’s after-tax compensation (ignore payroll taxes)? 

David and Lilly Fernandez have determined their tax liability on their joint tax return to be $3,100. They have made prepayments of $1,900 and also have a child tax credit of $2,000. What is the amount of their tax refund or taxes due?

Aram’s taxable income before considering capital gains and losses is $60,000. Determine Aram’s taxable income and how much of the income will be taxed at ordinary rates in each of the following alternative scenarios (assume Aram files as a single taxpayer).

a. Aram sold a capital asset that he owned for more than one year for a $5,000 gain, a capital asset that he owned for more than one year for a $500 loss, a capital asset that he owned for six months for a $1,200 gain, and a capital asset he owned for two months for a $900 loss.

Jeremy (unmarried) earned $100,000 in salary and $6,000 in interest income during the year. Jeremy’s employer withheld $10,000 of federal income taxes from Jeremy’s paychecks during the year. Jeremy has one qualifying dependent child (age 14) who lives with him. Jeremey qualifies to file as head of household and has $25,000 in itemized deductions.

Explain what it means to say that a married couple filing a joint tax return has joint and several liability for the taxes associated with the return?