H&R Block Final Exam Review | Latest Update | 100% Correct | Verified Answers 2024, Exams of Advanced Education

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Tony (28) and Adam (27) are cousins and lived in the same home throughout 2017. Adam only earned $2,500 in 2017. Tony earned $25,000 in 2017. What test does he meet? Adam meets the relationship and member of household test for Tony, since Adam lived with Tony the entire year. Tony may be able to claim Adam as a qualifying relative dependent. Note: Being cousins alone will not meet the relationship test for qualifying relative, because a cousin is not listed as a specific relative relationship. However, a cousin, like other non-relatives, may meet the relationship test for qualifying relative if the individual lived in the taxpayer's home for the entire year Recall Tony-28 $25000 and Adam-27 $2500; cousins from an earlier example, Tony provided more than half of Adam's support. Adam is not permanently and totally disabled. Can Tony claim Adam? Tony may claim Adam as a dependent because he meets all four tests for qualifying relative.

1. Adam is too old to be someone else's qualifying child
2. Relationship or all year
3. gross income is less than $4,
4. support c3 John lives with Robert, his father. John provides 30% of Robert's support Can he claim Robert?. John may not claim Robert as a dependent, because John failed the qualifying relative support test. c3 Yolanda lives with her daughter, Elizabeth. Elizabeth is the qualifying child of Yolanda. Neither Yolanda nor anyone else can claim Elizabeth as their qualifying relative. Can she claim daughter? since Elizabeth meets the definition of a qualifying child

Relationship, age, residency, support, joint return c3 Ron (35) and Sue (35) are married and have two children, * Todd (8) and Tracy (6) *. Neither child has income. Stacy (13), Sue's child from a previous marriage, came to live with them on July 4, 2017. Prior to moving in with Ron and Sue, Stacy was supported by and lived with her father. How many QC and QR? Todd and Tracy are qualifying children of Ron and Sue (2 QC). Stacy is neither a qualifying child nor a qualifying relative of Ron and Sue (0 QR). Because she was supported by and lived with her father for more than six months, she cannot be a qualifying child for Sue (residency test) and is not a qualifying relative of Ron and Sue (qualifying child test).

e3.1 Dale (25) is single. His brother, Jeff (27), lived with him for all of 2017. Jeff earned $3,100, all from wages, and had no other income. Dale provided more than half of Jeff's support. Jeff is not permanently or totally disabled. No one else lived with Dale. Qualifying relative QR? #2 QR - Yes Qualifying relative,

1. not QC; 2. brother& all year 3.<4050 4.support e3.1 Megan (27) is single. Her cousin, Pam (29), moved in with her in February of 2017. Pam earned $3,600, all from wages, and had no other income. Megan provided 60% of Pam's support. Pam is not permanently or totally disabled. No one else lived with Megan. QR? #5 N - No, Pam did not live with Megan the entire year, and cousins do not meet the relationship test for qualifying child or relative. e3.1 Martin is single. His mother, Agnes (61), came to live with him in August of 2017. Agnes earned $14,100, all from wages, and had no other income. Martin provided 25% of Agnes' support. Agnes is not permanently or totally disabled. No one else lived with Martin. QR? #6 N - Martin did not meet the qualifying relative gross income and support tests to claim Agnes as a qualifying relative dependent on his return.[14100<4050 F& suport 25% < 50%] e3.1 Ashley is single. Victoria (5) was lawfully placed in her care by the court of Your State in November of 2017. Victoria had no income and did not provide more than half of her own support. Prior to living with Ashley, Victoria lived with her mother for ten months. Ashley provided 20% of Victoria's support. No one else lived with Ashley. QR? #9 N - no - must live there for 6 months. Victoria lived with her birth mother for more than half the year e3.1 Mike (33) and Janet (34) are not married but lived together for all of 2017, and Mike provided the total support of the home, as Janet had no income. Living with them all year were Janet's two children, Tim (12) and Sally (9). Neither child had any income. Sally's father is Mike's brother. When Mike files his return, will Sally qualify as his QC, QR, or neither QR? #11 QC - QC because sally is his neice. e3.1 Lori (18) and her qualifying child, Cheryl (5 months), lived together with Lori's mother, Brenda (41), for all of 2017. Lori is Brenda's qualifying child, and Brenda will claim Lori as a dependent on her tax return. QR? Lori cannot claim herself, nor can she claim Cheryl. Brenda may also claim Cheryl if she meets all the required tests. e3.1 Amparo (32) and her qualifying child, Miguel (3), lived together for all of 2017. No one else can claim Amparo on their return. QC? Amparo may claim Miguel on her return, assuming the other tests are met. e3.1 Ian (51) lived together with his qualifying child, Robert (21), for all of 2017. In October 2017, Robert married Veronica (21), and both lived with Ian for the remainder of the year. Robert, a full-time student, did not work in 2017, and Veronica earned only $3,000. Robert and Veronica filed a joint return to get a

refund of $102 withheld from Veronica's wages. Neither Robert nor Veronica claimed his or her own exemption. QC or QR or none? Ian may still claim Robert as his dependent. (full-time student, 21yo) e3.1 Ronald (54) and Wendy (52) are married and lived with their qualifying relative, Gwyn (26), for all of

2017. In November 2017, Gwyn married Tim (27), and both lived with Ronald and Wendy for the rest of the year. Gwyn earned $2,400, and Tim earned $20,500 in 2017. Ronald and Wendy may not claim Gwyn as their dependent on their return if Tim and Gwyn file a joint return. [a taxpayer may not claim a married person as a dependent if the married dependent files a joint return] 3.2 1.Leslie is single. Jack is Leslie's qualifying child. No one can claim Leslie on their tax return. Jack is not married. Both Leslie and Jack are U.S. citizens. D or ND? dependent - Jack is clearly a dependent in this case. 3.2 2.Marcus is single. Quinta is Marcus's qualifying relative. Marcus may be claimed by his mother, but she is not going to claim him. Quinta is not married. Both Marcus and Quinta are U.S. citizens. D or ND? NOT DEPENDENT - Since Marcus can be claimed by his mother, Marcus cannot claim any dependents, whether his mother claims him or not. 3.2 3.Carl and Carrie are married. Carol is their qualifying child. No one can claim Carl or Carrie on their tax return. Carol is married to Paul. Neither Carol nor Paul is required to file a tax return. Carol had no income. Paul is filing a joint return with Carol only to claim a refund of the tax withheld. Carl, Carrie, Carol, and Paul are all U.S. citizens. D or ND? dependent -Carol meets all the requirements to be claimed as a dependent on Carl's and Carrie's tax return. 3.2 4.Tomas is single. Lucinda is Tomas' qualifying child. No one can claim Tomas on their tax return. Lucinda is not married. Tomas is a U.S. citizen. Lucinda is a resident of Mexico. D or ND? dependent -A resident of Mexico can be claimed as a dependent as long as other tests are met. 3.2 5.Orville and Marsha are married. Kevin is their qualifying relative. No one can claim Orville on their tax return. Marsha may be claimed by her father, but he is not going to claim her. Kevin is not married. Orville, Marsha, and Kevin are all U.S. citizens. D or ND? NO DEPENDENT- Since Marsha can be claimed by her father, she and Orville cannot claim a dependent on their return. 3.2 6.Mai is single. Lee is her qualifying child. No one can claim Mai on their tax return. Lee is married to Sonja. Neither Lee nor Sonja is required to file a tax return. Lee had no income. Lee and Sonja will not be filing a joint return. Mai, Lee, and Sonja are all U.S. citizens. D or ND? dependent - Since it states that Lee and Sonja did not file a joint return, the joint return test is clearly met. Therefore, since Lee meets all of the other requirements, he is Mai's dependent.

3.1 Does child' gross income test need to be met for a dependent to be a taxpayer's qualifying child? NO, Child's Gross income does not matter. A taxpayer's qualifying child must meet the support test, not the gross income test. They may have gross income more than $4,050, but they cannot provide more than half of their own support. Pat and Geri Dale are filing a joint return and have an adjusted gross income of $124,000 and three qualifying children. Their AGI exceeds $110,000 by $14,000, so their credit is reduced by $700 [$50 × 14 increments of $1,000 = $700]. Thus, their tentative Child Tax Credit is $2,300 [$3,000 - $700 = $2,300]. 3.2 CTC Example Joyce Potter (39) uses the head of household filing status and has three qualifying children. Her adjusted gross income is $87,563, all from wages. She has no foreign or U.S. possession income. Her tax before credits, Form 1040A, line 30 (Form 1040, line 47), is $9,759. She is claiming a $1,200 Child Dependent Care Credit on Form 1040A, line 31 (Form 1040, line 49). Joyce's CTC is reduced because her MAGI exceeds the phaseout threshold per her filing status. The credit is reduced by $50 for each $1,000 (or portion thereof rounded up to the nearest $1,000) of MAGI that exceeds her phaseout threshold amount. Filing HH, $87563-75,000 = 12563 round up 13,000,[13000*5%=650]; 3000-650 = $ 3.2 For taxpayer to claim the child tax credit, their QC must be........... Claimed on their return e4.1 Juanita (42) is unmarried and pays 65% of the cost of maintaining a home for her father, Barnaby (77). Juanita will claim Barnaby on her tax return in 2017. Juanita may file as head of household e4.1 Tim's father is his dependent, but Tim is not sure whether he or his father pays more than one-half the cost of maintaining the household. If Tim pays more than half the cost, he will qualify to file as head of household. The total costs for maintaining the home were $45,450, and Tim paid $22,950 of the costs. Since Tim pays 50.5% of the costs [$22,950 ÷ $45,450 total costs = 0.505], Tim will file as head of household. 4.1 Taxpayers may file as head of household if they meet all of the following requirements ex4.3: Paula and her son, Trey (5), lived all year with Paula's mother, Carolyn, who paid the entire cost of keeping up the home. Paula's AGI was $10,000 and Carolyn's AGI was $25,000. Trey's father, Gary, did

not live with Paula or Trey at any time during 2017. Under the rules for children of divorced or separated parents or parents who live apart, Trey will be treated as the qualifying child of Gary, who can claim the dependency exemption and the Child Tax Credit, since Paula signed a Form 8332 (4.3), releasing her claim to those benefits. Paula cannot claim Trey's exemption or the Child Tax Credit. Unmarried or "considered unmarried" on the last day of the tax year. •Paid more than half of the cost of maintaining the household for the year. •Maintained a household for either of the following: ◦A qualifying child or qualifying relative (see exceptions to the head of household requirements) who lived with the taxpayer for more than half the year, and the taxpayer can claim an exemption for them. ◦A parent(s) who the taxpayer must have paid more than half of the cost of maintaining the parent's main home for the entire year and must claim as an exemption on their return. The parent is not required to live in the home. e4.1 Tony and Adam are cousins. Adam is a qualified relative dependent of Tony. However, Tony may not file as head of household because their relationship as cousins does not meet the head of household relationship test. He must file as single. Unless Tony has another qualifying child or another relative that meets the relationship test for the qualifying relative, he cannot claim head of household. 4.1.1 Scott is single. His daughter, Rita, is his qualifying child. They lived together for all of 2017. Scott pays more than 50% of the cost of maintaining their home. Is he HH?yes or no Yes - Scott meets all requirements. 4.1.2 Wanda is single. Her mother, Anita, is her qualifying relative. Anita lived in her own home apart from Wanda for all of 2017. Wanda pays more than 50% of the cost of maintaining Anita's home each year. Wanda qualifies, since Anita is a parent. 4.1.3 Laura is married. Her husband, Alan, moved out in October of 2017. Her son, Edward, is her qualifying child. She lived together with Edward for all of 2017. Laura pays more than 50% of the cost of maintaining their home. Laura does not qualify since her husband was not out of the home for the last six months of the year. 4.1.4 Kaitlyn is single. Her friend, Leah, is her qualifying relative. Kaitlyn and Leah lived together for all of

2017. Kaitlyn pays more than 50% of the cost of maintaining their home. A qualifying relative does not qualify a taxpayer for head of household unless they meet one of the relationship tests. 4.1.5 Julie is married. Her husband, Gary, moved out in February of 2017. Her daughter, Kelli, is her qualifying child. She lived together with Kelli for all of 2017. Julie pays more than 50% of the cost of maintaining their home.

yes, Gary moved out in February; therefore, Julie is considered unmarried for tax purposes, and she has a qualifying child. e4.2 TB rules: Betty lives with her mother, Stephanie. Stephanie's AGI for 2017 is $32,650. Betty's AGI for 2017 is $21,350. Betty's daughter, Tami, lives in the same household as Betty and Stephanie. Tami is a qualifying child for both Betty and Stephanie. In 2017, Tami's mother, Betty, has the right to claim Tami as a qualifying child because the tiebreaker rules state that the parent of the child has the superior claim to the dependency exemption e4.2 TB rules: Linda, Jim, and Jane all live with Linda's mother, Fran. Jane is Linda's daughter, and Linda married Jim when Jane was three years old. Jane is an eligible qualifying dependent for either Linda or Jim or Fran. Jim and Linda's tax return shows an AGI of $23,000. Fran's tax return shows an AGI of $21,000. Jim and Linda will not claim Jane on their joint return. Therefore, Fran can claim Jane, since her AGI of $21,000 is treated as higher than the total AGI of the parents divided equally between Jim and Linda, as if each individual AGI were $11,500 [$23,000 ÷ 2 = $11,500]. When a form 8332 is signed. 1)What can noncustodial parent claim? 2)What can they not claim.

1. Claim dependeny exempTion, child Tax credit and ACTC.
2. Can not HH fiing status, daycare/childcare and EITC For each of the following scenarios, write the name of the taxpayer who has the superior claim to the dependency exemption. Be sure to consider all given facts. If no one is able to claim the dependency exemption, then simply write "No one." e4.4.1. Julie Ann (72) was claimed by both her son, Mark, and her other son, Samuel. Mark and Samuel each provided 40% of Julie Ann's support. The remaining 20% was paid by Julie Ann's niece, Kathy. Samuel filed Form 2120 with his return showing Kathy had waived her right to any exemption. Kathy gave Samuel a written statement indicating that she waived her right to claim the exemption. No one - Since not all qualified taxpayers agree on who should claim Julie Ann, then no one can claim her. e4.4.2. Linda (17) was claimed by her grandmother, Nadine. Linda lived with her mother, Rose, and grandmother for all of 2017. Nadine's AGI was $22,450. Rose's AGI was $34,650. Rose did not claim any dependents in 2017. No one - Since Rose did not claim any dependents, no one can claim Linda, since Rose's AGI is greater than Nadine's AGI. e4.4.3. Mario (5) was claimed by both his mother, Janice, and his father, Frank. Mario lived with both Janice and Frank for three months during 2017. Mario lived with his mother for five months separately. He lived with his father for four months separately. Janice - He lived with his mother for the greater amount of time.

e4.4.4. Camille (16) was claimed by her mother, Ida, and her father, Walter. Camille lived with each parent an equal amount of time in 2017. Ida's AGI was $44,255. Walter's AGI was $47,525. Walter - Walter had the greater AGI. e4.4.5. Gina (8) was claimed by her mother, Debra, and her grandmother, Myrna. Debra - When only one is the child's parent, the child is treated as the parent's qualifying child. e4.4.6. Darrell (12) was claimed by his aunt, Felicia, and his older brother, Gerald. Darrell lived with both Felicia and Gerald for four months. He lived with Felicia for five months separately. He lived with Gerald for three months separately. Felicia's AGI was $29,290. Gerald's AGI was $31,205. Gerald - If no parent claims the child, then the person with the highest AGI will claim Darrell. c11.2 Can he claim EITC? Mark Jones (22), a full-time student, and his son, Jeff (3), lived all year with Mark's father. Mark did not provide over half of his own support. Mark cannot claim the EITC, even if he otherwise qualifies, because Mark is a qualifying child of his father. Mark's father may or may not be able to claim the credit, depending on his earned income and AGI, along with all the other qualifications. c11.2 - To qualify for (EITC) the credit, all taxpayers must: (with or without child) •Have a valid social security number (SSN). •Not use the filing status MFS. •Be a U.S. citizen or resident alien all year. •Not file a Form 2555, Foreign Earned Income, or Form 2555-EZ, Foreign Earned Income Exclusion. •Have an investment income of $3,450 or less. •Have earned an income of at least $1. if no QC- must be 25 and under 65 c11 Taxpayer qualifying child's rules: Relationship (offspring or sibling) includes half, step, foster/adopted or descendant. Age <19 or <24 FTS - must be younger than taxpayer or spouse Residency - more than half year Married child- Must be able to claim Support. Only the custodial parent may claim the EITC with respect to the child. e11.3.1-8 qualify for EITC, why and how much? e11.3.1.Ronald (28) is filing as a single taxpayer with no dependents. Ronald's earned income and AGI in 2017 was $10,281, all from wages. He had no other income. He is a U.S. citizen. Yes, 15010 > 10281 [SINGLE,0,362] e11.3.2.Marty (24) is a single taxpayer, filing head of household, with one dependent, Mindy (2). Mindy is Marty's daughter, and she lived with him for all of 2017. No one else lived with Marty. Marty's earned

income and AGI was $23,457, all from wages. He had no other income. Both Marty and Mindy are U.S. citizens. Marty is not a full-time student. YES 39617 > 23457 [SINGLE,1,23457==>2579] e11.3.3.Rosalee (19) is filing as a single taxpayer with no dependents. Rosalee's earned income and AGI in 2017 was $8,974, all from wages. She had no other income. She is a U.S. citizen. No - if no QC- must be 25 and under 65 e11.3.4.Juan (52) is filing as a single taxpayer with no dependents. Juan's earned income and AGI in 2017 was $15,021, all from wages. He had no other income. Juan is a U.S. citizen. No, it is not less 15010 15021 > e11.3.5.Lorelei (29) and Sean (28) are married taxpayers, filing a joint return. Lorelei's income from wages was $18,871. Sean's income from wages was $10,465. They had $88 of interest income from their checking account. They had no other income in 2017. Lorelei and Sean are expecting their first child in June of 2018. Both are U.S. citizens. No QC, MFJ 20600 18871+10465 = 29336 (to much) e11.3.6.Junichi (34) and Mariko (32) are married taxpayers, filing a joint return. Junichi's gross income from wages was $34,281. Mariko had no income in 2017. They had no other income in 2017. Junichi and Mariko have one dependent daughter, Sakiko (4). They all lived together in 2017, and no one else lived with them. Junichi, Mariko, and Sakiko are all U.S. citizens. MFJ, 1 child 45207 34281 YES [MFJ,1,34281==>1747] e11.3.7.Ernest (45) and Teresa (41) are married taxpayers, filing a joint return. Ernest's income from wages was $23,457. Teresa's income from wages was $18,293. They had $144 of interest income from a money market account. They had no other income in 2017. Ernest and Teresa have two dependent sons, Michael (17) and Connor (15). They all lived together in 2017, and no one else lived with them. Ernest, Teresa, Michael, and Connor are all U.S. citizens. mfj, 23457+18293 =41750+int inc 144= 41894, 2 QC 50597 and QC <19 ys =YES [MFJ,2,41894==>1837] e11.3.8.Anita (42) is a married taxpayer. Her husband, Mark (43), has not lived with her since 2014 and Anita is considered unmarried for tax purposes, filing head of household. Anita's earned income and AGI was $28,478, all from wages. She had no other income. Anita has one dependent daughter, Samantha (14). Anita and Samantha lived together in 2017, and no one else lived with them. Both are U.S. citizens.

HH, 28478,1 QC

39617 >28478 = YES

[HH,1,28478==>1780]

(midterm) In 2017, Jennifer's (27) brother, Jim (18), her fiancée, Steve (29), and her daughter, Kim (5), lived with her for the entire year. Jennifer's AGI is $27,800, Jim's AGI is $5,050, Steve's AGI is $4,050, and Kim had no income. Jim, Steve, and Kim did not provide over 50% of their own support. Jennifer qualifies and files as head of household in 2017. How many exemptions can Jennifer claim on her return

1. relative or residency(all year) - yes
2. gross iincome < 4050 --> Jim 5050, Steve 4050 Gross Income Test: To meet this test, a person's gross income for the year must be less than 4,050. 3)Support - true Answer is 3 (Talk to kevin, should it be 2?) (midterm) Marissa and Lucius were married 18 years ago. They had one child, Matthew (13). Lucius passed away in 2013. Marissa did not remarry. Marissa and Matthew lived together all year long, and no one else lived with them. Matthew had no income in 2017. Marissa paid 100% of the cost of maintaining their home. What is the most beneficial 2017 filing status for Marissa? Died - 2013 Tax year- 2017 - 4 years ago Filing status QW You may refer to the Child Tax Credit section to help you complete this exercise. 3.3 1.Brianna Wakefield is divorced and filing head of household. Her SSN is 749-01-1789. Brianna has two qualifying children (May and Jake). Her AGI from Form 1040A, line 22, is $54,225. She will be claiming a total of three exemptions. Her tax from Form 1040A, line 30, is $4,241. Brianna is not claiming any other credits, nor is she excluding any foreign income. 2000 (1040A line 35) 3.3 2.Max Montana is filing head of household. His SSN is 749-01-1890. Max has one qualifying child, his daughter, Lisa. His AGI from Form 1040A, line 22, is $90,445. He will be claiming a total of two exemptions. His tax from Form 1040A, line 30, is $12,496. Max is not claiming any other credits, nor is he excluding any foreign income. 200 (1040A line 35)

4. 1 Sandy Remington has lived apart from her husband since February 3, 2017. She does not wish to file a joint return with her husband. Sandy and her husband do not have a decree of divorce or separate maintenance or a written separation agreement. She has provided more than half of the cost of the maintaining the home where she and her son, Mark, have lived all year. Sandy qualifies as unmarried for tax purposes. Sandy may file as head of household. 4.1 Thelma lived apart from her husband for all of 2017 and does not wish to file a joint return. She paid the entire cost of maintaining her home in Paducah, Kentucky. She maintains a room in the home for her dependent daughter, Daphne, who is currently attending college in Los Angeles, where she shares a dorm room with two other students. Most of Daphne's belongings remain at Thelma's home. Daphne

seldom visits her father and does not keep any of her belongings at his home. It is clear from the circumstances that Daphne's principal place of abode is Thelma's home. Since Thelma meets the qualification to be considered unmarried for tax purposes, she may file as head of household. kc4.3 Jamie and Matt divorced in 2010. Their son, Blake, lived with Jamie, Jamie's mother, Mary Ann, and Jamie's best friend, Angie, from January 1 to July 5 (157 nights). Blake visited Matt every other weekend (28 nights). On July 5, Blake went to live with Matt for the rest of the year (154 nights). He visited Jamie, Mary Ann, and Angie every other weekend (26 nights). Jamie's AGI was $31,215, Mary Ann's AGI was $20,731, Angie's AGI was $31,459, and Matt's AGI was $29,628. Who has the superior claim to Blake's dependency exemption? W Jamie - Blake lived with his mother, Jamie, Jamie's mother, Mary Ann, and Angie 183 days (157 + 26 = 183)in 2017. He lived with his father, Matt, 182 days (28 + 154 = 182) in 2017. As Blake's parent that he lived with the greater number of nights in 2017, Jamie has the superior claim to Blake's dependency exemption. EIC - (p240) John and Janet married, MFJ, 1 child, Amy(3) lived all year. John earned 9500, Janet earned

1500. Total is 11000 Qualify EIC? how much? Yes, 11000<45207; LU EIC = EIC (pg243) Kelly Green(30) lives with parents. Earned 6240 and 20 interest. no children. Qualify EIC? How much? Yes, 6260 <15010, LU EIC = EIC (pg233) EIC Qualifying child y/n Q: Your son's turns 19 on 12/10, not disabled No EIC pg233) EIC Qualifying child y/n Q: Your 23 brother FTS & single, lives with you spouse, not disabled. You and spouse are 21 and MFJ No, because he isn't younger than you or spouse EIC (pg233) EIC Qualifying child y/n Q: : Your 23 brother FTS & single, lives with you spouse, not disabled.. Your spouse is 25. Yes, QC because he is younger than spouse EIC (pg231) AGI. Are you eligible? Q: your AGI is $40550, single, and 1 QC. No, 39617 is the limit for single and 1 QC