Problem: Bob and Jane Kelso file a joint tax return. The couple's AGI averages $500,000. Consequently, their total exemption amount is subject to the maximum reduction. The Kelsos provide about 90 percent of the financial support for their 20-year-old daughter, Brenda, who is a junior at San Diego State University. This year, their daughter had no earned income but received $6,491 interest and dividend income from an investment portfolio inherited from a grandparent. The Kelsos understand that Brenda qualifies as their dependent. But if they do not claim her as a dependent on their Form 1040, can Brenda claim a full standard deduction and an exemption on her own Form 1040 (thereby reducing her taxable income to zero)?
Required: Prepare a brief memorandum in which you answer the Kelso's question and give supporting authority and explanation for your answer.