Evan and Eileen Carter are husband and wife and file a joint return for 2013.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 the above.

Question

Quizplus · Accepted Answer

The Carters may claim three dependency exemptions: one for Pamela, one for Belinda, and one for Peggy. Pamela is a qualifying child because she is under 24 years old, a full-time student, and the Carters provide more than half of her support. Belinda is a qualifying relative because she is over 65 years old and the Carters provide more than half of her support. Peggy is also a qualifying relative because she lived with the Carters for the entire year and they provided more than half of her support. The $5,000 scholarship does not affect Pamela's status as a dependent because it only covers tuition and not her overall support.

Evan and Eileen Carter Are Husband and Wife and File