REG 1 Individual Taxation: Exemptions

Question 1

When is a married taxpayer filing separately allowed to claim his or her spouse’s Personal exemption?

Answer 1

The taxpayer’s spouse has no gross income AND was not claimed as a dependent of another taxpayer.

Question 2

What is the phase-out rule of personal and dependency exemptions?

Answer 2

Reduces exemptions by 2% for every $2,500 or portion thereof ($1,250 for married taxpayers filing separately) by which AGI exceeds a specific limit.

Question 3

When is someone considered a qualifying child that entitles a taxpayer to a dependency exemption?

Answer 3

CARES
Close Relative (son, daughter, step, bro, sis, step, or descendent of any of these, legally adopted and foster)
Age Limit ( 19 or 24 for full time student or if disabled)
Residency and Filing Requirements ( > 1/2 tax yr.)
Eliminate Gross Income Test (must claim exemption)
Support Test Changes (child did not contribute more than 1/2 of their own support but parent doesn’t have to)

Question 4

When is someone considered a qualifying relative that entitles a taxpayer to a dependency exemption?

Answer 4

SUPORT
Support (over 50%) Test (for multiple support, > 10%)
Under a specific amount of (taxable) gross income Test (dependent’s gross inc.

Question 5

What is the general rule for custodial parents?

Answer 5

Parent who has custody for greater part of year takes exemption even if they didn’t provide of half of the support; if equal custody, parent with higher AGI claims exemption; custodial parent can wave right with attached form - can revoke with year notice with form)

Question 6

What must you be to have an increased standard deduction (not an additional exemption)?

Answer 6

Old (age 65 or older)

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