EA Practice Test 3

Based on the information provided, Ray's wife died in September 2010. Personal exemptions are typically claimed for individuals who are alive and can be claimed on their own tax returns. Since Ray's wife passed away, she would not be able to claim a personal exemption for herself. However, Ray is still alive and can claim a personal exemption for himself. Therefore, the correct answer is that Ray can claim personal exemptions for both himself and for his wife.

Tyler is single and 17 years old, and his parents provide the majority of his support. Therefore, his parents may claim him as a dependent on their tax return. However, since Tyler earned income in 2010, he is required to file his own tax return. Even though he cannot claim a personal exemption for himself, he is still entitled to the standard deduction for single filers.

In order for a child to be taken as a dependent on the adoptive parents' tax return, an identifying number must be obtained for the child, such as an ATIN, ITIN, or Social Security Number. This is necessary for the IRS to track and verify the child's information and eligibility as a dependent. The adoption becoming final and the child being related to the taxpayer by blood are not requirements for claiming the child as a dependent. Additionally, domestic adoptions qualify, but a taxpayer cannot claim a dependency exemption for a foreign-born child.

Alyssa may claim zero exemptions on her tax return because she is being claimed as a dependent on her parents' tax return. As a dependent, she cannot claim any exemptions for herself.

Donnie is considered the custodial parent for tax purposes because his daughter Violet lived with him for six months of the year, which meets the IRS definition of a custodial parent. Additionally, Donnie paid for Violet to go to summer camp for two months, further supporting his status as the custodial parent. Donnie's ex-wife, who had Violet for the rest of the year, would not be considered the custodial parent in this scenario.

Haley's parents can claim her as a qualifying child because she meets the age test (being under 24 and a full-time student) and her income does not exceed half of her total support. Therefore, she meets the criteria to be claimed as a dependent by her parents.

Peter qualifies for HOH (Head of Household) filing status because he meets the requirements. He is considered unmarried because he and his wife lived separately for the entire year and they did not file a joint return. Peter also provided a home for his qualifying child, his 10-year-old daughter, whom he can claim as a dependent. Additionally, Peter pays for all the costs of upkeep for the home, which further supports his eligibility for HOH filing status.

John can claim his mother as a dependent on his Form 1040 if she is a resident of any of the mentioned countries: United States, Mexico, or Canada. This means that regardless of which country John's mother resides in, he can still claim her as a dependent as long as she meets the other criteria for being a dependent.

Avery can file as Head of Household because he is unmarried and provides a home for his adopted son, Wyatt, who is permanently disabled. Wyatt is considered a qualifying child because he meets the age test and is permanently disabled. Therefore, Avery can claim the benefits of filing as Head of Household and claim Wyatt as his qualifying child.

The Disability Test is not a requirement for a taxpayer to claim an exemption for a dependent as a qualifying relative. This test is not relevant in determining if someone qualifies as a dependent. The other three tests mentioned - Citizen or Resident Test, Member of Household or Relationship Test, and Joint Return Test - are all criteria that must be met in order for a taxpayer to claim an exemption for a dependent.

Clifford is considered the custodial parent for IRS purposes because the child lived with him for the majority of the year (10 out of 12 months) in 2010. The divorce decree stating that Lily is supposed to be the custodial parent does not change the fact that Clifford had physical custody of the child for a significant portion of the year.

According to the information provided, Ashton is 23 years old and not a student. In order to be claimed as a qualifying child, the child must be under the age of 19 (or 24 if a full-time student). Since Ashton does not meet the age requirement, Ted and Sharon cannot claim him as a qualifying child. Additionally, Ashton does not meet the criteria to be claimed as a qualifying relative since he received income of $4,900 in 2010, which exceeds the income limit for a qualifying relative. Therefore, the correct statement is that Ted and Sharon may not claim Ashton as a dependent in 2010.

The correct answer is that Emma is not required to file a return, and Carson is not required to report his daughter's income on his own tax return. This is because Emma's interest income from the bank account is considered unearned income, and the threshold for filing a tax return for a dependent child is typically higher than $900. Additionally, parents are not required to report their child's unearned income on their own tax return unless the child's total income exceeds certain limits.

In a multiple support agreement, the taxpayer can provide a minimum of 10% support and still claim a dependent. This means that the taxpayer must contribute at least 10% of the dependent's total support in order to be eligible to claim them as a dependent on their tax return.

Both Wendy and Rachel are not required to file a tax return because their total income does not exceed the minimum threshold for filing taxes. Wendy only received $948 in dividends and Rachel earned $5,600 in wages, but no dividends were paid on her stocks. Since their income does not meet the filing requirement, neither of them needs to file a tax return.

Tony and Isabelle can claim exemptions for themselves, their child, Tony's grandmother, Isabelle's stepmother, and Isabelle's cousin. Since none of these individuals live with them, file a tax return, or have any income, they qualify as dependents and can be claimed as exemptions on Tony and Isabelle's joint return. Therefore, the correct answer is 5.

Bradley qualifies as Chloe's "qualifying child" for tax purposes because he lived with her all year, was 18 years old at the end of the year, and did not provide more than half of his own support. Additionally, his income from wages and investment income does not disqualify him from being considered a "qualifying child."