Answer:
1) D. None of these.
2) False
3) C. No, Jane is too old to be considered a qualifying child and fails the support test of a qualifying relative.
Step-by-step explanation:
1) AGI deductions are subtracted from the gross income to calculate the taxable income. Not all the individual's earnings are subject to taxation, therefore some expenses are deducted to calculate the Adjusted Gross Income, the one that will be taxed.
All of the three options listed ( Standard deduction, Itemized deduction, and personal exemption) are AGI deductions.
2) False
The potential qualifying relative does not have to be family/biologically related with the taxpayer. The IRS condition states that he/she is either family related or have lived in the taxpayer's abode for a whole year to be a qualified relative of the taxpayer. So far any of the two conditions are met, it is fine.
C. For a student to be regarded as a qualifying relative of her parents, she must not be up to 24 years at the end of the year according to IRS. Jane is already 25, she is too old and fails the test as a qualifying relative.
