[Evan Speck]

I found this question in the becker Reg package. The answer confuses me, because the notes say that, for the qualifying relative test, the taxpayer must provide more than 50% of the support, AND scholarships received by a potential dependent are NOT INCLUDED in determining the students total support. However, the answer includes the scholarship in determining Jane’s portion of her support. (in other words, Jane’s support = $17,000, Total Support = $30,000. 17,000/30,000 = 57%) Is this an error or am I just confused?

Jane is 20 years old and is a sophomore at Lake University. She is a full-time student and does not have any gross income. Jane spends the holidays and summers at home with her parents. Her total support for the current tax year is $30,000, including a scholarship for $5,000 to cover her tuition. Jane used $12,000 of her savings and her grandparents provided $13,000. Which of the following statements regarding the exemption for Jane is true?

Answer = Jane’s grandparents cannot claim her as a dependent because Jane provided more than half of her own support.