Problem 5 (4 Points Each; 50 minutes)

1. The Samsons are trying to determine whether they can claim their 22-year-old adopted son, Jason, as a dependent. Jason is currently a full-time student at an out-of-state university. Jason lived in his parents home for three months of the year and he was away at school for the rest of the year. He received $9,500 in scholarships this year for his outstanding academic performance and earned $4,800 of income working a part-time job during the year. The Samsons paid a total of $5,000 to support Jason while he was away at college. Jason used the scholarship, the earnings from the part-time job, and the money from the Samsons as his only sources of support. Can the Samsons claim Jason as their dependent?

a. True b. false

. Jasper and Crewella Dahvill were married in year 0. They filed joint tax returns in years 1 and 2. In year 3, their relationship was strained and Jasper insisted on filing a separate tax return. In year 4, the couple divorced. Both Jasper and Crewella filed single tax returns in year 4. In year 5, the IRS audited the couples joint year 2 tax return and each spouses separate year 3 tax returns. The IRS determined that the year 2 joint return and Crewellas separate year 3 tax return understated Crewellas self-employment income, causing the joint return year 2 tax liability to be understated by $5,700 and Crewellas year 3 separate return tax liability to be understated by $6,450. The IRS also assessed penalties and interest on both of these tax returns. Try as it might, the IRS has not been able to locate Crewella, but they have been able to find Jasper. What amount of tax can the IRS require Jasper to pay for the Dahvills year 2 joint return and year 3 return, respectively?

a. $5,700; $-0- b. $0; $0-0 c. $2,850; $3,225 d. $2,850; $-0-

Problem 3 (6 Points; 5 minutes)

Denny is a 16-year old full time student who is claimed by his parents as a qualifying child. Dennys income consists of interest income of $4,000 and earnings from a summer job of $3,700. How much is Dennys taxable income and income tax for 2016? His parents marginal tax rate is 28%.