Additionally, she provides a home for her parents. Parents are the only exception to the requirement
that dependents must live in the same household as the taxpayer to qualify the taxpayer for head of
household status. (LO 1.5)
1-2 Chapter 1 – The Individual Income Tax Return
19. Single. Unmarried with no dependent.
Head of household. Single or abandoned spouse, with qualifying dependent.
Qualifying widow(er). Spouse died within the past 2 years and has a qualifying dependent. (LO 1.5)
20. a. Yes, his son qualifies as a dependent, meeting the tests of a qualifying relative.
b. No. His son must live in the same household as Marquez, so Marquez cannot use the head of household
filing status. (LO 1.5 and 1.6)
21. a. Yes $500 other dependent credit
b. No (fails gross income test) $0
c. Yes $2,000 child tax credit
d. Yes $500 other dependent credit
e. No $0 (LO 1.6)
22. $0. Exemptions were suspended for tax years 2018–2025. $4,000. Both children qualify for the $2,000
child tax credit. (LO 1.6)
23. No. Because Charles is self-supporting, his parents may not claim him as a dependent. The self-support
test is applied to both children and relatives who otherwise qualify, so Charles is disqualified either way.
(LO 1.6)
24. No. Phillip cannot be claimed as a dependent because he is not a U.S. citizen or a resident of the U.S.,
Canada, or Mexico. (LO 1.6)
25. EIP $2,400. For Luke and Vanessa only.
RRC $2,900. Luke and Vanessa’s $2,400 EIP plus $500 for a qualifying child. (LO 1.7)
26. The standard deduction is a specific dollar amount that varies with filing status, age and vision, but not
by type of individual deduction. Total itemized deductions depend on the amount and type of items, with
some items having limitations based on AGI. They include medical expenses, certain taxes, certain interest
expenses, charitable contributions and miscellaneous deductions.
A taxpayer should claim the larger of the standard deduction or the total allowed itemized deductions to
reduce the taxpayer’s income subject to tax as much as possible. (LO 1.8)
27. The answer will vary depending on the date the problem is assigned and completed. The purpose of the
problem is to familiarize the student with the IRS website. (LO 1.10)
28. The blank forms are not reproduced here. By the time the student is assigned this problem, the current
year’s forms should be available. (LO 1.10)
29. The limit for student loan interest deduction is $2,500. (LO 1.10)
Solutions for Questions and Problems – Chapter 1 1-3
Group 3 – Writing Assignments
1. Research Solution:
Whittenburg and Gill, CPAs
San Diego, CA
February 20, 20xx
Mr. and Mrs. William Carson
3276 Lakeline Drive
San Diego, CA
Dear William and Sheila,
Thank you for requesting my advice concerning the tax treatment of your brother Jerry. I have researched
your question and am sorry to say that you cannot claim Jerry as a qualifying child.
Although Jerry meets the domicile, age, joint return, citizenship, and self-support test, he does not meet
the relationship test. Even though he is William’s brother, in order to be your qualifying child, he must
be younger than at least one of you.
Although you can’t claim him as a qualifying child, there is a possibility that you could claim Jerry as a
qualifying relative if he earns less than $4,300.
My conclusion is based upon the facts that you have provided me. I’m sorry that the news was not more
favorable. If you have any questions or would like further explanation, please do not hesitate to call me.
Sincerely,
Trevor Malcolm
for Whittenburg and Gill, CPAs
2. Ethics Solution:
To: JasonandMary@email.com
Subject: Inquiry on filing status: single v. married filing jointly
Jason and Mary,
Thank you for your e-mail regarding your filing status for 2020. Let me also say, I really enjoyed your
wedding ceremony and reception. Thank you for inviting me.
Your e-mail stated that you had prepared your 2020 taxes as both single and married filing jointly and found
that your refund would be larger if both of you filed as single. Unfortunately, the tax law is very clear on this
issue. Individuals who are married as of the last day of the tax year are considered to be married. Married
taxpayers have only two filing status options: married filing jointly or married filing separately. In order to
file as single, taxpayers must be unmarried or legally separated from their spouse as of the last day of the
tax year. Not only would it be unethical for you to file as single, it would be against the law.
The additional tax that married couples sometimes encounter is known as the “marriage penalty.” Hope-