Evan and Eileen Carter are husband and wife and file a joint return for 2014.Both are under 65 years of age.They provide more than half of the support of their daughter,Pamela (age 25),who is a full-time medical student.Pamela receives a $5,000 scholarship covering her tuition at college.They furnish all of the support of Belinda (Evan's grandmother),who is age 80 and lives in a nursing home.They also support Peggy (age 66),who is a friend of the family and lives with them.How many dependency exemptions may the Carters claim?
A)Two
B)Three
C)Four
D)Five
E)None of these

Question

Quizplus · Accepted Answer

Three (Pamela,Belinda,and Peggy).Pamela is not a qualifying child-although a full­time student,she is not under age 24.Pamela does meet the qualifying relative category as the type of scholarship aid she receives is nontaxable (the gross income test is satisfied).Belinda is not a member of the household but satisfies the relationship test.Peggy does not satisfy the relationship test but is a member of the household.

Evan and Eileen Carter Are Husband and Wife and File