This answer seems conflicting based on the CARES rule in Becker. Please help.
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. Four.
b. Three.
c. Two.
d. Five.
Explanation:
Choice “a” is correct.
Nicole and Andrew can claim two personal exemptions for themselves.
Travis does not qualify for a dependency exemption. Travis is not a full-time student, so at age 20 he is not a qualifying child. Although Nicole and Andrew provide more than half of his support, Travis makes more than the exemption amount ($3,650), so he is not considered as a qualifying relative, either.
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.
John is a qualifying relative of Nicole and Andrew because they supplied over half of his support and his taxable income is less than the exemption amount.
I figured the answer was 3 exemptions. The mother and father and John. I figured Luke wasn't a qualifying dependent because it specically says in Becker that the child must live with the taxpayers for “MORE than half the year”. The facts in the question just says “half the year” and the answer says it's because he lives with his parents for at least part of the year. Which one is it for the Residencey requirement under CARES?
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