1.Belle and Mr. Gold are married. Both are under 65, and neither one is blind. B
ID: 2441314 • Letter: 1
Question
1.Belle and Mr. Gold are married. Both are under 65, and neither one is blind. Belle is a librarian and earns 10,000 in salary. Mr. Gold runs the pawn shop and makes a salary of 100,000 and earns interest income of 10,000. Of the 10,000, 2,000 is from state bond interest. Mr. Gold has one child, Neil (age 30) who passed away this year. Prior to his death, Neil lived with Mr. Gold for 3 months, and by himself in NY for the other 9 months. Neil provided 51% of his support. Belle and Mr. Gold wish to file a “single” return because they feel they would pay less tax.
a.Is Neil a dependent?
b.What is Mr. Gold and Belle’s filing status?
c.How many dependency exemptions are they entitled to?
d.What is their AGI?
e.What is their taxable income?
(PLEASE SHOW YOUR WORK)
Explanation / Answer
1. Since Neil was 30 years old, he did not qualified the age test and thus was not dependent.
2. Their filing status is married filling jointly
3. They would get 2 exemptions. One would be personal and other spouse exemptions
4. Their AGI would be $ 10000 + $ 100000 + $ 10000 - $ 2000 = $ 118000
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