Discussion:Married filing separately and living apart

living apart for married filing separately?

The real question here is why is MFS being considered? taxea

it since he's living in the nursing home.

taxbilly

They are not considered living apart if the only reason he is not in the home is because he is in a nursing home. taxea

We don't know if he was placed in the nursing home or chose to move there voluntarily to get away from his wife's nagging. And the phrasing "absence may be considered temporary" leaves the obverse phrasing open, meaning it may also be considered nontemporary.

If one enters the discussion with the ironclad conclusion that "nursing home" equates to temporary separation no matter the circumstances, the reasons, or the duration, then one's mind is made up, and any arguments to the contrary are going to be deemed irrelevant no matter what they are. On the other hand, if one enters the discussion only assuming that "nursing home" probably equates to temporary separation, then we at least have a rebuttable presumption open to argument. And if you begin with a presumption that's rebuttable, then by definition you have to allow for the possibility that the presumption may indeed ultimately be rebutted.

I don't equate the phrase "My client's husband is receiving social security and was looking for a way not to pay taxes on it since he's living in the nursing home" to fraud. Why can't it be a tax minimizing strategy to which the client may or may not be entitled. At the very least, it's a legitimate question with a thus far unsettled answer. I don't dismiss the strategy out-of-hand, at least based on the limited facts available so far. If the guy has found a loophole and his facts allow him the benefit of that loophole, then so be it.

[*For Pete's sake, spare me the tired, threadbare litany that these are only pubs and not the Almighty Code. I am aware. They may not settle the issue, but at least they raise it. So far I haven't seen anything that settles it, but the pubs and the RIA reference are nibbling away at the presumption. I remain of the belief that it's a fact-specific case for which we simply don't have sufficient facts to come down one way or another.]

PS: I know I need to do a profile. I just don't have any credentials worth mentioning.

Having been personally acquainted with such situations, I would wonder how anyone could have made my spouse part of my household when she had little or no memory of its inhabitants, what it looked like or ability to participate in the life going on outside the home. Here is one of my more optimistic slants of what was happening in 2001: http://www.writing.com/main/view_item/item_id/255628

Seems to be we could subdivide our board into not only CPAs, EAs and others in-between, but also into those who throw around the 'Fr' word at every chance and those who don't.

We must remember that filing status and rules go back more than 60 years, to a time before doctors knew little about Alzheimer's or the dementia that afflicted my wife. Of course there was senility but then more often than not the family stayed together. I suspect that some day soon the Service will rule that if the subject's illness and institutionalization would qualify as long term care expenses, the spouse will be given the opportunity to file separately and as not living with his/her spouse.

To those who would argue that the person on the outside is paying the bills, I would note that often people live apart with separation agreements providing support for one party.

Our tax code is not static, not 'two legs good, four legs bad,' but is continually in the process of interpretation. Witness IRS' expansion of conditions under the 2 year rule under Section 121, or the change that came about when selling a multi-use residence.

Neither the statute nor the legislative history defines what “live apart” means. See S. Rept. 98-23, at 27 (1983), 1983-2 C.B. 326, 328; H. Conf. Rept. 98-47, at 122 (1983), 1983-2 C.B. 336, 340. Similar language to that contained in section 86(c)(1)(C)(ii) is contained in sections 22(e)(1), 66(a)(2)(A), 152(e)(1)(A)(iii), 219(g)(4)(B), and 469(i)(5)(B)(ii). Therefore, we look to the case law interpreting the phrase “live apart” contained in those sections. [pg. 377]

In Costa v. Commissioner, T.C. Memo. 1990-572, in 1970 the taxpayer and her husband purchased a residence located in Fairfax, California (Fairfax residence). In 1982, as a result of marital problems, the taxpayer moved out of the Fairfax residence. During 1982, the taxpayer's husband also moved out of the Fairfax residence. In 1983, the taxpayer resumed residing at the Fairfax residence. In 1984, the taxpayer's husband visited the Fairfax residence several times on an intermittent basis, he used the Fairfax residence address for receiving mail, he kept documents and clothes there, he received telephone messages there, he had a key to the Fairfax residence, and he came and went at his convenience. The taxpayer did not file a joint return with her husband for 1984. The taxpayer did not obtain a formal termination or separation, and as of the time of trial the taxpayer was still legally married to her husband.

We concluded that, for purposes of section 66(a), the taxpayer “did not live apart at all times during the year as required by statute” for 1984. Costa v. Commissioner, T.C. Memo. 1990-572. We based our holding on the fact that during 1984 the taxpayer's husband intermittently resided at the Fairfax residence. Id.

In Dawkins v. Commissioner, T.C. Memo. 1991-225, during 1987 the taxpayer and his wife were in the process of obtaining a divorce. During 1987, the taxpayer had not obtained a legal separation, and the taxpayer, his wife, and his three children all resided in the same household. The taxpayer and his wife, however, maintained separate quarters under the same roof.

We concluded that, for purposes of section 152(e), the taxpayer and his wife were not “living apart” because they lived under the same roof. Dawkins v. Commissioner, T.C. Memo. 1991-225. In determining what “living apart” meant, we referred to several cases that considered what living apart meant in the context of alimony payments and being separated ( sections 71 and 215). Id. In those cases, courts held that “living apart” meant living in separate residences. Lyddan v. United States, 721 F.2d 873, 876 [52 AFTR 2d 83-6254] (2d Cir. 1983); Washington v. Commissioner, 77 T.C. 601, 605 (1981) (a Court-reviewed decision, disagreeing with the U.S. Court of Appeals for the Eighth Circuit's holding in Sydnes v. Commissioner, 577 F.2d 60 [42 AFTR 2d 78-5143] (8th Cir. 1978), revg. 67 T.C. 170 [pg. 378] (1977), that taxpayers could be treated as separated when both are living under the same roof); Coltman v. Commissioner, T.C. Memo. 1991-127, affd. 980 F.2d 1134 [71 AFTR 2d 93-378] (7th Cir. 1992).

Additionally, we have explored the concept of living apart as it related to sections 2 and 7703. As it relates to these sections, we held that living apart required geographical separation and living in separate residences. Chiosie v. Commissioner, T.C. Memo. 2000-117 [TC Memo 2000-117]; Hopkins v. Commissioner, T.C. Memo. 1992-326.

Furthermore, prior to amendment by section 121 of the Tax Reform Act of 1986, Pub. L. 99-514, 100 Stat. 2109, section 85(b) defined a “base amount” for purposes of computing the taxable amount of unemployment compensation similarly to section 86(c)(1). Section 1.85-1(b)(4), Income Tax Regs., which was still in effect during the year in issue, provided:

A taxpayer does not “live apart” from his or her spouse at all times during a taxable year if for any period during the taxable year the taxpayer is a member of the same household as such taxpayer's spouse. A taxpayer is a member of a household for any period, including temporary absences due to special circumstances, during which the household is the taxpayer's place of abode. A temporary absence due to special circumstances includes a nonpermanent absence caused by illness, education, business, vacation, or military service. [pg. 379] We conclude that for purposes of section 86(c)(1)(C)(ii) “living apart” means living in separate residences.

More info needed. Does the community spouse work?

With passive loss rules and active participation in rentals, I can see taxpayers attempting to gin up a 'but we live separately' position when possibly not justified, or look at HOH issues and the Hopkins case, but people don't take to nursing homes to get away from their spouse or pull a ruse on Sam.

I had a client, a doctor who called himself a hired gun, who read the Service position regarding removal of lead paint as a medical expense [no higher than the kid could reach]. As he pointed out, the true danger would be that the child to pick up and eat the paint on the ground that fell from high on the wall. We took the deduction because he was positive he would skewer them in court.....wasn't audited. I would feel the same about the situation in this case.