[Code of Federal Regulations]
[Title 26, Volume 1]
[Revised as of April 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.4-1]

[Page 24-25]
 
                       TITLE 26--INTERNAL REVENUE
 
     CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY
 
PART 1--INCOME TAXES--Table of Contents
 
Sec. 1.4-1  Number of exemptions.

    (a) For the purpose of determining the optional tax imposed under 
section 3, the taxpayer shall use the number of exemptions allowable to 
him as deductions under section 151. See sections 151, 152, and 153, and 
the regulations thereunder. In general, one exemption is allowed for the 
taxpayer; one exemption for his spouse if a joint return is made, or if 
a separate return is made by the taxpayer and his spouse has no gross 
income for the calendar year in which the taxable year of the taxpayer 
begins and is not the dependent of another taxpayer for such calendar 
year;

[[Page 25]]

and one exemption for each dependent whose gross income for the calendar 
year in which the taxable year of the taxpayer begins is less than the 
applicable amount determined pursuant to Sec. 1.151-2. No exemption is 
allowed for any dependent who has made a joint return with his spouse 
for the taxable year beginning in the calendar year in which the taxable 
year of the taxpayer begins. The taxpayer may, in certain cases, be 
allowed an exemption for a dependent child of the taxpayer 
notwithstanding the fact that such child has gross income equal to or in 
excess of the amount determined pursuant to Sec. 1.151-2 applicable to 
the calendar year in which the taxable year of the taxpayer begins. The 
requirements for the allowance of such an exemption are set forth in 
paragraph (c) of Sec. 1.152-1. See paragraphs (c) and (d) of Sec. 1.151-
1 with respect to additional exemptions for a taxpayer or spouse who has 
attained the age 65 years and for a blind taxpayer or blind spouse
    (b) The application of this section may be illustrated by the 
following examples:

    Example 1. A, a married man whose duties as an employee require 
traveling away from his home, has as his sole gross income a salary of 
$5,600 for the calendar year 1954. His traveling expenses, including 
cost of meals and lodging, amount in such year to $750, and hence, his 
adjusted gross income is $4,850. His wife, B, has as her sole income 
interest in the amount of $85, and thus the aggregate adjusted gross 
income of A and B is $4,935. A has two dependent children neither of 
whom has any income. A and B file a joint return for 1954 on Form 1040. 
In such case four exemptions are allowable. The adjusted gross income 
falls within the tax bracket $4,900-4,950. By referring to such tax 
bracket in the tax table in section 3 and to the column headed ``4'' 
therein, the tax is found to be $407.
    Example 2. C, a married man, has as his sole income in 1954 wages of 
$4,600, and has two dependent children neither of whom has any income. 
His wife, D, has adjusted gross income of $400. C files a separate 
return for 1954 and is entitled to claim three exemptions. C's income 
falls within the tax bracket $4,600-4,650 and hence, with three 
exemptions his tax is $480. No exemption is allowed with respect to 
since D has gross income and a joint return was not filed.
    Example 3. D, a married man with no dependents, attains the age of 
65 on September 1, 1954. The aggregate adjusted gross income of D and 
his wife for 1954 is $4,840. D and his wife file a joint return for 1954 
and are entitled to three exemptions, one for each taxpayer and one 
additional exemption for D because of his age. Since the adjusted gross 
income of D and his wife falls within the tax bracket $4,800-4,850, the 
tax on a joint return is $509.

[T.D. 6500, 25 FR 11402, Nov. 26, 1960, as amended by T.D. 7114, 36 FR 
9018, May 18, 1971]