The Tax Questions Blog

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Question: Answer these tax questions please?

1. How much in a year does someone have to live with you if you are claiming Head of Household?
2. What gives you the best tax deduction.. filing MFS, MFJ or Single?
3. How much capital gain do you have to make on the sale of a home, and how long do you have to live in a home before it is not considered a taxable capital gain on the sale?
4. Can the IRS garnish your unemployment benefit if you owe back child support?
5. What is the amount of standard deduction for a single person and can I write off donations if they amount to less than my standard deduction?

I am asking these questions to see how many of you answer correctly. I keep getting thumbs down from ignorant people in here on answers that are perfectly correct and valid. So what is up with all the thumbs down?
10 points for best answer. Thanks.

Answer: 1. Your CHILD or other qualifying person has to live with you more than half of the year and you must have paid more than half of the cost of maintaining your household. However if the qualifying person is your dependent parent they do not need to live with you at all.

2. The highest standard deduction goes to MFJ.

3. There is no limit on the CG you can make. If you meet the tests you can exclude some or all of it from tax, $250,000 if your filing status is Single, HoH, or Qualifying Widow(er) or $500,000 if MFJ. You must own and live in the home for 2 of the 5 years immediately prior to the sale and not have claimed the exclusion within 2 years immediately prior to the sale.

4. The IRS has no control over unemployment insurance. The state that pays the coverage can dock it for unpaid child support, however.

5. For 2007 it's $5,350. You can only take charitable donations if you itemize and while you COULD itemize your deductions if they totaled less than the standard deduction it would not make sense to do so. However if you file MFS and your spouse itemizes then you must also itemize even if your itemized deductions are less than your standard deduction.

However I must challenge your claim that your answers are "perfectly correct and valid." You have a FEW answers that were OK but quite a few more than were either missing important details or were simply wrong from the start. I'd be happy to provide a laundry list of them if you wish, though someone else has already done so so I see no need to compound the misery. I suspect that you're either a newbie to taxation OR someone who has failed to keep up on the rapid pace of change in tax law.

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