[Anonymous]

Wiley Question –

Question:

During 2012 Robert Moore, who is 50 years old and unmarried, maintained his home in which he and his widower father, age 75, resided. His father had $4100 interest income from a savings account and also received $9700 from Social Security during 2012. Robert provided 60% of his father’s total support for 2012. What is Robert’s filing status for 2012, and how many exemptions should he claim on his tax return.

The answer to this question is single and 1 exemption. I understand that Robert Moore’s filing status is single since his father has gross income of $4100 which is higher than $3800, but why does he has 1 exemption. The only exemption I can think of from this question is $9700 from Social Security, but doesn’t that an exemption toward Robert’s father when he files, and not for Robert? Or am I understanding whole thing wrong?

[yomomma]

First of all, I believe Robert can only get 1 personal exemption on himself and not on his dependent. Robert can't get an exemption on Robert's father for Robert's tax return because his father has an interest income of $4,100, failing one of exemption tests for dependents. (if it was nontaxable interest Robert can get an exemption on his father)

And for the social security benefits, Robert's father could get a deduction(not an exemption) on his own tax return(not Robert's) if his father's income was over $25,000.

I think you are confused about the differences between deductions and exemptions. They do both lessen your taxable income but in different concepts.

FAR - 79
AUD - 82
REG - 83
BEC - 77 Booya

[Anonymous]

Thank you for the reply, why did I miss personal exemption. Somehow I was so concentrating on dependent exemption that I totally forgot that there's personal exemption of $3800. Thank you, again!

[Author]

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