Discussion:Can Newborn satisfy Residency Test?
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Discussion Forum Index --> Tax Questions --> Can Newborn satisfy Residency Test?
| 7 May 2008 | |
| I need to clarify who can claim the dependent for a newborn.
A child was born on September 15, 2007. He lived with his mom and dad for about 4 weeks. After that, mom and child moved out and were cared for and supported by his grandparents (about 13 weeks in 2007). Mom and dad filed a joint return. The residency test for a qualifying child says that the child must have lived with the taxpayer for more than half of the year. For a newborn in 2007, can that statement be interpreted as "lived with either of the joint taxpayers for more than half of his life"? In other words, would the child meet the residency test in respect to his grandparents and not with mom and dad? Or would the residency tests be met by both parties, in which case the tie-breaker rules would be used? | |
| 8 May 2008 | |
| The law is silent on this issue. However, Internal Revenue Service Publication 17, page 27 addresses this issue by stating that a child born during the year is treated as having resided with you for the entire year if he lived with you the entire time that he was alive. Note that this is a holdover from the old HOH regs and I am not sure that this really addresses the 152 statute.
I think it would be more reasonable to allow the exemption if the child lived with the taxpayer for more than one-half of the taxpayer’s taxable year, or the entire time the child was alive, whichever is less. Using the above arbitrary criteria, it does appear that the child is a qualifying relative of the grandparents and is not a qualifying child of the parents. | |
| 8 May 2008 | |
| Riley,
When I started typing the discussion, the thought was that, okay, mom and child moved out almost right away and did not live with dad, so why should dad claim the dependency. But as I was typing, I realized that, even though mom and child did not live with dad, they did file a joint return, and MOM did live with the child the whole time, albeit most of the time under the grandparents' roof and support. So, in interpreting that "the child did live with 'you' the entire time that he was alive", in the case of a joint return, does that "you" mean "both of you" or "either one of you"? | |
| 8 May 2008 | |
| If the mother lived with the child the entire time he was alive, then the mother and father may claim the child on a joint return. | |
| 8 May 2008 | |
| On page 26 of Publication 17 there is a footnote that makes it clear that there are exceptions for a child born during the year regarding living with the taxpayer for more than 1/2 year . Also page 27 addresses this issue.
It is my understanding that the child is a qualifying child of the grandparents as well because he is their grandchild and meets the relationship test as well as the 4 other tests (page 26 ,Publ 17 ) Basicly as I see it the child is both a qualifying child of the mother as well as the grandparents. As a result, a strong case could be built that the grandparents could claim the dependency exemption particularly since the grandchild lived with the granparents for over 70 % of the year. However if the mother is claiming the child on the joint return you would not want to proceed on that path. | |
