1. Bob is a single parent after his wife passed away last year. He maintains a home for his dependent child who has lived with him the entire year. Bob hit the mega millions and become wealthy overnight. He put $10 million into a bank account in his childs name that earns $100k of interest a year.

What is Bobs filing status? Why?

Does Bobs child file a tax return? Why? Explain in a few sentences.

2. Aaron and his 4 brothers provide support for their father who lives in their home. The facts are

as follows.

Total cost of support: $80,000

Support provided by each of the following children is as follows:

Aaron: $20,000

Bill: $7,500

Chuck: 18,000

Derrick: $4,500

Eric: $30,000

Can anyone claim the dependent care credit? Why?

3. Tyler has the following capital gains and losses:

Short Term Capital Gain: $10,000

Short Term Capital Loss: ($4,000)

Long Term Capital Gain: $15,000

What is the total capital gains / losses? What is the tax rate?