Discussion:Dependent Gross Income Test
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Discussion Forum Index --> Tax Questions --> Dependent Gross Income Test
| 23 February 2007 | |
| I have a 79 year old client who has been filing head of household with his 85 year old lifetime companion as a dependent. I understand this is legitimate if she meets the gross income test, but last year she made $26,271 in tax exempt interest (and $9 taxable interest and $23 dividends). Does this still meet the requirements? My reading suggests it does, but it seems to me it is a technicality. | |
Tfortaxes@msn.com (talk|edits) said: | 23 February 2007 |
| First of all the lifetime companion does NOT make him head of household. Check out Pub 17, page 23, table 2-1 for who qualifies. Second. The client may be able to claim the companion as a dependant an still get the 3300.00 exemption but he must prove support. Pub 17, page 32 for the worksheet. The client must provide more than 50% of the amount required to support the companion. I think you have a snowballs chance at a bon fire to actually pull this one off! | |
| 24 February 2007 | |
| WayneCPA, this might have worked under the old law. However, an unrelated dependent is not a a head of household qualifier under the new rules. | |
| 10 April 2009 | |
| Just got asked by my office manager as she was printing returns. For years client has claimed his elderly parent on return as a dependent. There was never any income before other than Social Security. She is 68 this year and she also had a $3,800 distribution from the Teamsters <yes, I know, don't mess with them>.
The $3,800 distribution prevents her from being a dependent this year, and disregarding the support test. It looks like the IRS definition of Gross Income does not include Social Security. So, if mother only receives Social Security of $18,000, it is ok to claim her as long as support test is met? | |
Pink Pearl (talk|edits) said: | 10 April 2009 |
| I think if mom banks the 18K each year its probably ok...support can be shown. | |
| 10 April 2009 | |
| I guess my main question was is Social Security exempt from the $3,500 gross income calculation? | |
Rgtaxservice (talk|edits) said: | 10 April 2009 |
| Non taxable Social Security is not included in the $3500 test. It is included in the Support Test though, unless she banks alot of it. | |
| 10 April 2009 | |
| Thank you, that was the way I read it as well. Wanted to confirm. And yes, the support test is met. | |
| 11 April 2009 | |
| In these situations I would love to see an actual support worksheet. I am the skeptical type and find it difficult to believe that someone can prove support of someone that gets 18,000 in SS. Of course where I live that would be extremely unusual. Maybe for some higher society folks with expensive homes it would be a walk in the park. | |
| 11 April 2009 | |
| She actually had SS income of $13,000, but I know what you mean. But, one thing you have to take into consideration is what portion of that $13,000 is actually used for support. If she takes all of it and leaves it in the bank, then none of it was used for support. Just because they received the income, does not mean it was used for support. | |
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