Question

45 Which of the following taxpayers is eligible to claim the head of household filing status? Marks: 1 Choose one answer a. The taxpayer's boyfriend lived in the taxpayer's home all of 2018. The boyfriend qualifies as the taxpayer's dependent b. The unmanied taxpayer pays more than half the cost of keeping his father in an assisted living facility. The father qualifes as the taxpayer's dependent c. The taxpayers married child lived in the taxpayer's home for the entire year. The taxxpayer cannot daim the child as a dependent. d. The custodial parent has signed a Form 8332. This allows the taxpayer who is the noncustodial parent to claim the child as a dependent Which of the following statements is not correct for reporting a hobby on an income tax return? 46 Marks: 1 Choose one answer a Hobby income is reported on Schedule 1. lne 21 b. Hobby income and expenses are reported on Schedule C, but Schedule SE is not required to be filed c. Deductions are not allowed for expenses against hobby income. d. Hobby income is not included in SE income

Answer 1

Answer to Q#45 (First question in the list): Option-(b): the unmarried taxpayer who pays more than half of the cost of keeping his father in an assisted living facility. The father qualifies as the taxpayer's dependent. Reason: For claimining Head of Household Filing Status, taxpayer must be qualified by satisfying all of the following conditions: --> Taxpayer is unmarried or considered unmarried on the last day of the year; --> Taxpayer has paid more than half the cost of keeping up a home for the year. It should be noted carefully that person qualified to be considered as dependent must have lived with the taxpayer in the home for more than half the year. However, there is a an exceptional situation like temporary absences, such as school, etc., whereby rule of half year stay will not be applicable. Another important point that should be noted is that person qualified to be considered as dependent doesn't have to live with the taxpayer in the home, if such qualifying person is is a dependent parent.