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Hiya,
On Wiley textbook Individual #104 the question reads:
“During 2011, George (age 9 and claimed as a dependency exemption by his parents) received dividend income of $3700 and had wages from an after-school job of $1700. What is the amount that will be reported as George’s taxable income for 2011?”
Answer explanation reads: “since George is eligible to be claimed as a dependency exemption by his parents, there will be no personal exemption on George’s return and his basic standard deduction is limited to the greater of $950 or George’s earned income of $1700 plus $300.
dividends 3700
+wages 1700
=AGI 5400
-exemptions 0
-standard deduction (2000)
=Taxable income $3400
How exactly did the $300 come from?
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