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I am taking a class on taxation and have to do a tax return. I am struggling with a few parts and was hoping someone would lend a hand. I posted the full problem below. My questions are a) with regards to Sam (the deceased father), TurboTax listed him as a dependent once I put that he was deceased, but I do not think this is correct. Can someone please confirm if he qualifies as a dependent. My understanding was that he would not, but that the medical bills paid on his behalf, would be deductible (subject to 10% floor and 2% AGI). Also, the problem seems to go out of its way to state that the medical bills were the majority of the support paid for Sam, so I have a feeling this information is not irrelevant, but I haven't the foggiest idea where to apply that information. If I force the tax program not to include him as a dependent, I get $369 for the total return. If at all possible, if someone would confirm this, as well, I would truly appreciate it.

    Alice J. and Bruce M. Byrd are married taxpayers who file a joint return. Their Social Security numbers are 123-45-6789 and 111-11-1112, respectively. Alice's birthday is September 21, 1968, and Bruce's is June 27, 1967. They live at 473 Revere Avenue, Lowell, MA 01850. Alice is the office manager for Lowell Dental Clinic, 433 Broad Street, Lowell, MA 01850 (employer identification number 98-7654321). Bruce is the manager of a Super Burgers fast-food outlet owned and operated by Plymouth Corporation, 1247 Central Avenue, Hauppauge, NY 11788 (employer identification number 11-1111111).
    The following information is shown on their Wage and Tax Statements (Form W–2) for 2015. 
Line        Description Alice   Bruce
    1       Wages, tips, other compensation $58,000 $62,100
    2       Federal income tax withheld 4,500   6,300
    3       Social Security wages   58,000  62,100
    4       Social Security tax withheld    3,596   3,850
    5       Medicare wages and tips 58,000  62,100
    6       Medicare tax withheld   841 900
    15      State   Massachusetts   Massachusetts
    16      State wages, tips, etc. 58,000  62,100
    17      State income tax withheld   2,950   3,100
    The Byrds provide over half of the support of their two children, Cynthia (born January 25, 1991, Social Security number 123-45-6788) and John (born February 7, 1995, Social Security number 123-45-6786). Both children are full-time students and live with the Byrds except when they are away at college. Cynthia earned $4,200 from a summer internship in 2015, and John earned $3,800 from a part-time job.
    During 2015, the Byrds provided 60% of the total support of Bruce's widower father, Sam Byrd (born March 6, 1939, Social Security number 123-45-6787). Sam lived alone and covered the rest of his support with his Social Security benefits. Sam died in November, and Bruce, the beneficiary of a policy on Sam's life, received life insurance proceeds of $1,600,000 on December 28.
    The Byrds had the following expenses relating to their personal residence during 2015: 
   Property taxes   $5,000
   Qualified interest on home mortgage  8,700
   Repairs to roof  5,750
   Utilities    4,100
   Fire and theft insurance 1,900
   The Byrds had the following medical expenses for 2015: 
   Medical insurance premiums   $4,500
   Doctor bill for Sam incurred in 2014 and not paid until 2015 7,600
   Operation for Sam    8,500
   Prescription medicines for Sam   900
   Hospital expenses for Sam    3,500
   Reimbursement from insurance company, received in 2015   3,600
   The medical expenses for Sam represent most of the 60% that Bruce contributed toward his father's support.
   Other relevant information follows:
   •    When they filed their 2014 state return in 2015, the Byrds paid additional state income tax of $900.
   •    During 2015, Alice and Bruce attended a dinner dance sponsored by the Lowell Police Disability Association (a qualified charitable organization).               The Byrds paid $300 for the tickets. The cost of comparable entertainment would normally be $50.
   •    The Byrds contributed $5,000 to Lowell Presbyterian Church and gave used clothing (cost of $1,200 and fair market value of $350) to the Salvation Army. All donations are supported by receipts, and the clothing is in very good condition.
   •    In 2015, the Byrds received interest income of $2,750, which was reported on a Form 1099–INT from Second National Bank.
   •    Alice's employer requires that all employees wear uniforms to work.      During 2015, Alice spent $850 on new uniforms and $566 on laundry charges.
   •    Bruce paid $400 for an annual subscription to the Journal of Franchise Management and $741 for annual membership dues to his professional association.
   •    Neither Alice's nor Bruce's employer reimburses for employee expenses.
   •    The Byrds do not keep the receipts for the sales taxes they paid and had no major purchases subject to sales tax.
   •    All members of the Byrd family had health insurance coverage for all of 2015.
   •    Alice and Bruce paid no estimated Federal income tax. Neither Alice nor Bruce wants to designate $3 to the Presidential Election Campaign Fund.
  • What do you mean by "non-resident"? – user102008 Nov 12 '16 at 2:46
  • Sorry for the poor wording. I meant that they do no live in the taxpayer's residence. – kadus Nov 12 '16 at 2:50
  • What do the tax form instructions give as the definition of dependent? It usually is that simple, at least if you aren't dealing with huge sums of money or trying to push the boundaries. – keshlam Nov 15 '16 at 5:32
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In the above situation, deceased father (Sam) can be claimed. Also, it doesnt matter if the medical expenses were paid for sam or alice or bruce, bcz dependent medical expenses are also deductible.

  • 1
    Do you have a reference for this? – Marcus D Nov 24 '16 at 9:19

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