Evan and Eileen Carter are husband and wife and file a joint return for 2017. Both are under 65 years of age. They provide more than half of the support of their daughter, Pamela (age 25), who is a full-time medical student. Pamela receives a $5,000 scholarship covering her tuition at college. They furnish all of the support of Belinda (Evan's grandmother), who is age 80 and lives in a nursing home. They also support Peggy (age 66), who is a friend of the family and lives with them. How many dependency exemptions may the Carters claim?
A)Two
B)Three
C)Four
D)Five
E)None of these

Question

Quizplus · Accepted Answer

The Carters can claim dependency exemptions for their daughter, Pamela, and Evan's grandmother, Belinda. They cannot claim a dependency exemption for Peggy because she does not meet the qualifying relative criteria. Therefore, they can claim three dependency exemptions: two for Pamela and one for Belinda. The fact that Pamela received a scholarship does not disqualify her as a dependent as long as the scholarship is not used for living expenses.

Evan and Eileen Carter Are Husband and Wife and File