William H. Jordan - Page 4

                                        - 3 -                                         

          return for the year 2003 as a head-of-household and claimed the             
          son and daughter as dependents.  Petitioner also claimed an                 
          earned income credit of $3,563.                                             
               In the notice of deficiency, respondent disallowed the                 
          dependency exemption deductions for the son and daughter, changed           
          petitioner’s filing status to single, and disallowed the earned             
          income credit.  At trial, petitioner conceded he was not entitled           
          to the dependency exemption deduction for his daughter because              
          her income exceeded his income.                                             
               With respect to the claimed dependency exemption deduction             
          for the son, section 151(c) allows taxpayers to deduct an annual            
          exemption amount for each dependent, as defined in section 152,             
          whose gross income for the year is less than the exemption                  
          amount.  Sec. 151(c)(1)(A).  Under section 151(d), the exemption            
          amount is $2,000.  Petitioner’s son, during the year at issue,              
          earned income of $13,357.  Therefore, since petitioner’s son                
          earned gross income in excess of the exemption amount under                 
          section 151(c)(1)(A), it follows that petitioner is not entitled            
          to a dependency exemption deduction for his son for the year at             
          issue.  Respondent, therefore is sustained on this issue.2                  

               2Sec. 151(c)(1)(B) provides generally that a dependency                
          exemption deduction is allowed for a claimed dependent if the               
          claimed dependent has not attained age 24 at the close of the               
          taxable year and is a student.  Even though petitioner’s son was            
          enrolled as a student at St. Petersburg College during the year             
                                                             (continued...)           





Page:  Previous  1  2  3  4  5  6  7  Next

Last modified: May 25, 2011