USE 2018 TAX RULES FOR THE FOLLOWING: 1) Brian is single and lives alone. He cov
ID: 1174632 • Letter: U
Question
USE 2018 TAX RULES FOR THE FOLLOWING:
1) Brian is single and lives alone. He covers all of the household expenses of his mother Bonney who lives down the street. Bonney has gross income of $4,500. Can Brian file as “head of household" for 2018?
2) Maria is a single taxpayer. Who qualifies as her dependents? See below:
A) Her niece Maxine who is a full-time student, 22 years old, and lives with Maria. Maxine has gross income of $4,500. Maxine is supported by her boyfriend Pablo, who lives in Brazil and just sends Maxine money each month.
B) Her great-grandfather Marvin, whom Maria supports 100%. Marvin lives in Chicago. He’s 92 years old and has gross income of $5,000.
Explanation / Answer
1) Brain covers all the household expenses of his mother Bonney. This means that Bonney is dependent on Brain. Therefore as per the 2018 tax rules, The income of a dependent is clubbed with the income of the assessee. The Gross Income of $4500 of Bonney will be clubbed in the hands of Brain as Head of Household.
2) In the context of Maria Following are her dependents:
a) Niece doesn't fall under the definition of Relative under the tax rules, hence Maxine is not the dependent of Maria.
b) Great Grandfather doesn't qualify for the definition of the relative as per the tax rules, therefore he is also not a dependent of Maria.
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