During your annual tax preparation meeting, Mary announced that she will be moving into her own apartment during the next year. As you congratulated her, she indicated that her father was not very happy about losing his tax credits.

When questioned about this statement, Mary indicated that her father had been claiming Mary and her daughter Livvie as his dependents.

Additional Background Mary, 24, is a single mother who cares for her 4-year-old daughter, Livvie. Mary sporadically receives small monthly payments from Livvie's father to help with costs for Livvie's care. Livvie doesnt spend any time with her father.

Mary is an independent contractor and earns income of $9,000 from tutoring college students. Mary lives with her parents and pays them a fair amount each month for rent. Mary has been saving her income so that she can move into her own apartment with Livvie. Mary has paid for Livvie's clothing and food, and has taken Livvie on vacation trips to Disney and other kid-friendly resorts.

Mary's parents, Livvie's grandparents, have been spoiling their granddaughter with toys and presents and have taken care of Livvie when Mary is working.

Your Task Research the rules concerning dependents, and determine who has the right to make a claim for dependents during the past tax year (Mary or her parents). State your assumptions, identify the issues that must be resolved, and cite all tax law to support your conclusions. What should be the firm's position in this matter?