MrAnd MrsBennett File a Joint Tax Return

question 49

Essay

Mr.and Mrs.Bennett file a joint tax return.Determine if each of the following unmarried individuals is either a qualifying child or a qualifying relative for whom the couple can claim an exemption.
a.Son Alex,age 22,lives in his parents' home and works fulltime as a tax accountant.Alex is self-supporting except for the fact that he does not pay rent to his parents.
b.Daughter Samantha,age 20,is a full-time college student.Samantha lives in a dormitory during the school year,but her parents' home is her permanent residence and they provide 100% of her financial support.
c.Mr.Bennett's brother Max is 42 years old and mentally handicapped.Max lives in a privately operated group home,and Mr.and Mrs.Bennett provide 100% of his financial support.Max has no gross income.
d.Mrs.Bennett's mother,Vera,age 67,lives in a retirement community.Mr.and Mrs.Bennett provide about 75% of her financial support.Vera earned $5,000 this year as a part-time receptionist.

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Definitions:

Stock Investments

Financial assets representing ownership in a company, which may provide dividends and entail voting rights.

Debt Investments

Investments made through the purchase of bonds or loans, providing the investor with interest income and the return of principal over time.

Interest Revenue

Income earned from lending money or from investments in interest-bearing accounts.

Net Income

The amount of profit remaining after all operating expenses, taxes, and interest have been deducted from total revenue.