Which of the following describes a relative in terms of tax relations?

The correct answer accurately reflects the legal definition of a relative for tax purposes, specifically noting relationships that can impact tax filings and benefits. A relative, in tax context, is generally defined as someone who is related by blood, marriage, or adoption. This includes direct family members like parents, siblings, and children as well as extended family through marriage or adoption connections.

Recognizing these relationships is crucial because they can determine eligibility for various tax deductions, credits, and considerations such as dependent exemptions. Understanding how tax law defines relatives enables taxpayers to take advantage of applicable tax benefits that might not be available for unrelated individuals.

The other choices do not fit the legal definition and do not pertain to the relationships that affect tax situations. An unrelated individual living in the same household does not establish a familial relationship that tax regulations recognize. A corporate entity managing finances does not constitute a personal or familial tax relation. Additionally, a friend, regardless of the duration of the friendship, lacks any familial ties recognized within tax law. Thus, only the definition involving blood, marriage, or adoption accurately describes a relative in the context of tax relations.