Question

D) Elena is a U.S. citizen and a resident of Italy. Her household includes Carlos, a four-year-old adopted son who is a citizen of Spain. Compute the number of personal and dependency exemptions.

a) Two
b) Three
c) Four
d) Five

Answer 1

Elena can claim two exemptions on her taxes: one personal exemption for herself and one dependency exemption for her adopted son, Carlos.

Step-by-step explanation:

The question on how many personal and dependency exemptions Elena should compute for her tax situation falls under the category of taxation, which is a part of business studies. Given that Elena is a U.S. citizen living abroad and has an adopted son who is a non-U.S. citizen, she would likely be eligible for a personal exemption for herself and a dependency exemption for her son, provided that she meets the IRS requirements for claiming a dependent. Thus, the correct answer would be two exemptions: one personal exemption for Elena and one dependency exemption for her adopted son, Carlos.