Assignment:
Gwen Stefani and Gavin Rossdale were married on September 14, 2002 in St Paul's, Covent Garden, London. A second wedding was held in Los Angeles two weeks later. According to Stefani, it was held so that she could wear her custom-designed wedding dress by John Galliano twice. Rossdale became a US citizen in 2010.
Stefani and Rossdale have 3 sons; Kingston James McGregor Rossdale born on May 26, 2006, Zuma Nesta Rock Rossdale born on August 21, 2008, and Apollo Bowie Flynn Rossdale born February 28, 2014. On August 3, 2015, Stefani filed for divorce from Rossdale, citing "irreconcilable differences". Their divorce was finalized on April 8, 2016. On November 4, 2015, Stefani and her The Voice co-star, country music artist Blake Shelton, announced that they were dating.
After the divorce, all 3 children continued to live with Gwen. She provided 80% of their support (Gavin provided the remaining 20%) and maintained the household.
In May 2016, Gwen's younger sister, Jill, age 40, moved in to help with the children. Jill was going back to school full-time and Gwen provided 60% of her support. She also paid her $10,000 as a nanny for the children.
Gwen's mother, Patti, is 89. She received social security benefits of $11,000 and has interest income of $2,000. She lives alone in a retirement community. This income constitutes 20% of her own support. Gwen, her brothers, Eric and Todd, and her mother's friend, Beverly, provide the remaining 35%, 25%, 5% and 15%, respectively.
Gwen earned $5 million in 2016 from her music career, her role on The Voice and as the voice of DJ Suki in the animated film Trolls. Even though her band No Doubt, broke up, the former members of the band still own a partnership for royalties. Gwen owns 20% of the partnership. The partnership's total income in 2016 was $500,000 and Gwen received a $50,000 distribution from the partnership.
Kingston is a child model and earned $3,000 wages. He also earned $500 interest on his bank account.
1 Are Gwen and Gavin permitted to file a joint tax return in 2016?
2 What is Gwen's filing status in 2016?
3 Assume the divorce was not finalized until 2017 and that Gavin had moved out in February 2016. What are Gwen's filing status options?
4 Assume the divorce was not finalized until 2017 and that Gavin had moved out in September 2016. What are Gwen's filing status options?
5 Can Gwen claim Kingston as a dependent?
6 Can Gavin claim Kingston as a dependent?
7 Can Gwen claim Jill as a dependent?
8 Who, if anyone, may claim Patti as a dependent?
9 Does your answer to #8 change if Patti received $5,000 wages from working at the library at the retirement community?
10 What is Kingston's standard deduction?
11 Is Kingston required to file a separate tax return in 2016?
12 What is Kingston's personal exemption?
13 Is Jill required to file a separate tax return in 2016?
14 Assume that Gwen signs form 8332 for all three boys and does not claim any additional dependents. What is Gwen's filing status?
15 Assume that Gwen claims all three children as dependents. What is Gwen's child tax credit?
For 16-20, assume that Gavin passed away in January 2016, before the divorce was finalized. Gwen did not remarry in the next 5 years and continued to support and maintain the household for the boys.
16 What is Gwen's most beneficial allowable filing status option?
17 Can Gwen claim a personal exemption for Gavin in 2016?
18 What is Gwen's filing status in 2017?
19 What is Gwen's filing status in 2018?
20 What is Gwen's filing status in 2019?