Taxation Problem:

• Monica is age 54 and was widowed in 1999. She owns her own home and provided all the cost of keeping up her home for the entire year. Her only income for 2020 was $29,000 in W-2 wages.
• In January of 2020, Monicas daughter Jennifer, age 25, and her granddaughter Maria, age 3, moved in and lived with her the entire year. Jennifers only income for 2020 was $13,000 in unemployment compensation. Jennifer provided over half of her own support. Maria did not provide more than half of her own support.
• Monicas sister Clara is age 47. She lived with Monica for the last 7 months of 2020. Her only income for 2020 was $26,350 in W-2 wages. She used this income to provide over half of her own support.
• All individuals in the household are U.S. citizens with valid Social Security numbers. No one has a disability.

1. Which individuals can make an agreement on who can claim Maria as a dependent?

a. Monica and Jennifer

b. Monica and Clara

c. Jennifer and Clara

d. Monica, Jennifer, and Clara

2. Who can claim the earned income for Maria?

a. Clara, because she has the lower AGI

b. Jennifer, because she is Marias mother

c. Monica, if Jennifer allows her to claim Maria as a dependent

d. None of the above