[SkiBum1990]

Nicole and Andrew Harris contribute to more than half of the support of their three children, Travis, Luke, and John. Travis, age 20, worked full time at the local deli and earned $20,000. Luke, 18, is a part-time college student who earned $5,000 working as a resident assistant in the student dormitory where he lived half of the year. John, age 25, is an aspiring actor who lives at home with Nicole and Andrew. John earned $2,500 for the three commercials he starred in. How many exemptions can Nicole and Andrew claim on their Year 1 joint tax return?

a) 5
b) 3
c) 4
d) 2

My answer was (Nicole, Andrew, John), but Becker says 4 (add Luke) — The reason I didn’t include Luke was because per IRS rules and even Becker MNEMONIC “CA(R)ES”, the child must live with the taxpayer MORE THAN 1/2 the year… NOT at least 1/2.

In the question it says Luke lived in the dormitory for HALF of the year, therefore he had to live at home the other 1/2 of the year.

Becker’s explanation is: “Luke is a qualifying child of Nicole and Andrew because he is under the age of 19 and lives at home at least part of the year. There is no gross income or support test that needs to be satisfied in the case of a qualifying child.”

I’ve seemed to come across this type of situation a lot.

anyone else come across this nonsense?

"The mind can only absorb as much as the seat can take"

B - 79
A - 68, __ (got bumped from Aug 4 release to Aug 23-THANKS AICPA)
R - Oct
F - Nov (HA! 1 month to study working full-time; love NTS rules)

[So FAR So Good]

You're supposed to infer quite a bit due to an exception to the residency rule (which they really only explain in some of their MCQs).

1) He lived in a student dormitory. He meets residency requirements because there is a “temporary absence” exemption while attending school.

2) Being “temporarily absent” means he still maintains his “permanent residence” with his parents, which is a huge key point, as that is what “CARES” defines.

and, this one is a bit of a stretch, but can also be inferred:

3) He is not a full time student from a tax perspective (which means he had to have been enrolled for at least part of five months during the year), but he could have possibly been full-time for one semester that lasted, say, four months. That would have likely qualified him for on-campus housing which makes it reasonable to assume that he lived there at least in part for school, not work.

Long story short, the residency rule has an exemption for students living away from home.

Hope this helps.

F - 91 (6/5/2016)
A - 7/30/2016
R - 10/8/2016
B - 12/10/2016

[SkiBum1990]

Thanks! I kind of figured it was due to something along those lines…. its just sad, considering if this were the test, I clearly knew the rule, yet didn't “infer” like they would like me to and would have got it wrong. — Given the nature of these exams, you never know when they are trying to trick you which I thought was the case… there are a lot of “greater than/equal to, less than, less than/equal to etc etc” rules… and its annoying to have to think about being tricked or having to infer for a questions… as if we don't have enough things to think about… sigh

Thanks again for your input 😀 –noted!

"The mind can only absorb as much as the seat can take"

B - 79
A - 68, __ (got bumped from Aug 4 release to Aug 23-THANKS AICPA)
R - Oct
F - Nov (HA! 1 month to study working full-time; love NTS rules)

[Anonymous]

Just to clarify for future questions – the whole time that he's temporarily away for school counts as time at home, so if he was away both semesters, it would still count as a dependency exception. Then if he takes summer courses so is really away all year and only home for fall, spring, and Christmas break (3-4 weeks total), it still counts.

This is the sort of trickery that should exist in the exam. The annoying thing is that you're watching for word games and it makes it easy to miss the tax law that you should be watching for.

[SkiBum1990]

agreed… although it seems the “temporary absence” explanation seems to have fallen through the cracks in the Becker textbook.. maybe I'll see it in more MCQ explanations

Thanks

"The mind can only absorb as much as the seat can take"

B - 79
A - 68, __ (got bumped from Aug 4 release to Aug 23-THANKS AICPA)
R - Oct
F - Nov (HA! 1 month to study working full-time; love NTS rules)

[Author]

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