Question

During 2018, Jenny, age 14, lives in a household with her father, uncle and grandmother. The household is maintained by the uncle. The parties, all of whom file separate returns, have AGI as follows: father ($30,000), uncle ($50,000), and grandmother ($40,000).

1a. Father
1b. Uncle
1c. Grandmother

2. which of Jenny's relatives takes precedence in claiming her as a dependent?

Answer 1

The uncle, who maintains the household in which Jenny resides, takes precedence in claiming her as a dependent due to having the highest adjusted gross income (AGI) among Jenny's relatives in 2018.

Step-by-step explanation:

To determine which relative can claim Jenny as a dependent, we first need to ensure that she meets the dependency tests. Since Jenny is under the age of 19 and lives with her father, uncle, and grandmother, she passes the relationship and residency tests.

To pass the support test, we need to determine whether her total support for the year exceeds half of her total income and whether it exceeds $1,050 (the 2018 dependency exemption amount). Since Jenny's relatives provide all of her support, she meets this requirement as well.

Next, we apply the tiebreaker rules to determine which relative can claim Jenny as a dependent. Since all three relatives have different AGI levels, we can apply rule 1 to determine who can claim Jenny as a dependent. The uncle has the highest AGI among Jenny's relatives, so he takes precedence in claiming her as a dependent according to this rule.

Additionally, since the uncle maintains the household in which Jenny resides, this further supports his ability to claim her as a dependent.

In summary, since Jenny meets all three dependency tests and her uncle has both the highest AGI and maintains the household in which she resides, he is able to claim her as a dependent according to both the dependency tests and tiebreaker rules.