Discussion:Dependent..for whom?

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Discussion Forum Index --> Advanced Tax Questions --> Dependent..for whom?


Discussion Forum Index --> Tax Questions --> Dependent..for whom?

Dbfs (talk|edits) said:

20 February 2012
Facts:
  1. Parents, by Court Order, share legal and physical custody of the child.
  2. From 10/15/2010 until 4/7/2011, the child resided with his parents at their apartment.
  3. From 4/7/2011 until 9/13/2011, the child resided with his Mother at the Grandparents home.
  4. From 9/13/2011 forward, the child mostly resided with his Mother at his Grandparents home.
  5. The Mother did not work last at all in 2011; the Grandparents provided support for their Grandchild.

Based on these facts, who do say is entitled to claim the Dependent on the 2011 tax return?

I believe the Grandparents are entitled to claim the dependent on their tax return.

CathysTaxes (talk|edits) said:

20 February 2012
Child is related to grandparents.

Grandparents provided more than 50%. Even when child lived with mother, it was at grandparents home, so child lived with grandparents more than 6 months.

Looks like the grandparents are the winner.

SCCPA (talk|edits) said:

20 February 2012
Child also lived in the same household as mother for more than six months. That would make both mother and grandparents custodial parents and the child a qualifying child of each. Under the tie-breaker rule, that would make the natural parent the one to claim the exemption.

I don't see how support enters into the equation as this is a qualifying child. Also, while it was the grandparents home, it is still the same household that Mom was living in.

If Mom doesn't claim the child, grandparents can. If mother has no income, I can't see why she would claim the child, but she still has first choice.

Ddoshan (talk|edits) said:

20 February 2012
Good luck with that one. I would be suprised if Dad had not already filed and claimed the child if he had earnings. Doesn't mean he should have or was qualified to. Based on the post it could be somewhat close depending on from 9/13 on. Dad might be able to squeeze 5 months out of it which to him might easily be strectched a little.

Deback (talk|edits) said:

February 20, 2012
The answer depends on the amount of the mother's income and the amount of the grandparents' income. Those facts are not given in the question, so there is no correct answer yet. The tiebreaker rules do not have to be used, as long as the mother and grandparents can agree who will claim the child, but without knowing their income levels, we don't know if one of them can be eliminated from having to file in the first place -- and the actual bottom line tax benefits for each the mother and the grandparents.

"The Mother did not work last at all in 2011."

I don't know what you meant to say in the above sentence. Did the mother not work at all in 2011 or did the mother not work at all in the last however many months in 2011? Please rewrite that sentence and include the total incomes of both the mother and the grandparents.

SCCPA (talk|edits) said:

20 February 2012
The answer depends on the amount of the mother's income and the amount of the grandparents' income.

I disagree - the tiebreaker rule for income only applies if the tie breaker rule for natural parent does not. See Sec. 152(c)(4)(a) of the statute. As the default goes to the natural parent, there is no need to go to the income rule.

Deback (talk|edits) said:

February 20, 2012
SCCPA,


I think you misunderstood my post. We need to have the rest of the facts in order to determine if the mother is required to file a return. And the same with the grandparents. Their incomes will answer that question.


Dbfs,

Please read the following (Special Rule for Qualifying Child of More Than One Person) under "Tiebreaker Rules."

http://www.irs.gov/publications/p504/ar02.html#en_US_2011_publink1000242188

Tiebreaker rules. To determine which person can treat the child as a qualifying child to claim these six tax benefits, the following tiebreaker rules apply. If only one of the persons is the child's parent, the child is treated as the qualifying child of the parent.

If the parents do not file a joint return together but both parents claim the child as a qualifying child, the IRS will treat the child as the qualifying child of the parent with whom the child lived for the longer period of time during the year. If the child lived with each parent for the same amount of time, the IRS will treat the child as the qualifying child of the parent who had the higher adjusted gross income (AGI) for the year.

If no parent can claim the child as a qualifying child, the child is treated as the qualifying child of the person who had the highest AGI for the year.

If a parent can claim the child as a qualifying child but no parent does so claim the child, the child is treated as the qualifying child of the person who had the highest AGI for the year, but only if that person's AGI is higher than the highest AGI of any of the child's parents who can claim the child. If the child's parents file a joint return with each other, this rule can be applied by dividing the parents' total AGI evenly between them; see Pub. 501 for details.

SCCPA (talk|edits) said:

20 February 2012
Their incomes will answer that question.

I was pointing out that their incomes may determine which one can have the most benefit, but has no effect on the tiebreaker rule. The tiebreaker rules provides the exemption goes to -

the natural parent, or

if the natural parent rule does not apply, the individual with the higher income.

As the natural parent rule does apply, I don't think relative incomes enter into the equation.

Trillium (talk|edits) said:

20 February 2012
this post has been edited. I originally had a post here that said, effectively, that it seemed to me the prior two posters were saying the same thing but not realizing it, with some examples. I was just trying to kind of keep things calm and pleasant, if I could (ala the Code of Conduct). However, I seem to have made things worse, and it's not my fight, so I'm backing out of it.

Rupert (talk|edits) said:

20 February 2012
Deback/Trillium,

I know we have some unknowns here regarding income, but will you please explain to me why the tiebreaker rules don't apply if the mother and grandparents simply agree? Are you saying that if mother's AGI is higher than grandparents, then grandparents can still claim child if agreed upon?

I was under the impression that if child may be claimed by 2 people and one is the parent, then child is treated as qualifying child of the parent. If the parent doesn't claim the child, then the grandparent may claim the child, but only if AGI is higher than parent (which we don't know in this case).

152(c)(4)(C)No parent claiming qualifying child.— If the parents of an individual may claim such individual as a qualifying child but no parent so claims the individual, such individual may be claimed as the qualifying child of another taxpayer but only if the adjusted gross income of such taxpayer is higher than the highest adjusted gross income of any parent of the individual.

SCCPA (talk|edits) said:

20 February 2012
Rupert, I agree. I was citing the income rule in Sec. 152(c)(4)(A)which defaults to the parent. I didn't consider 152(c)(4)(C) as the daughter was stated to have not worked. I guess I would phrase my answer:
  1. The daughter has first choice in claiming the dependent (even though it may not be to her advantage to do so) and
  2. If she doesn't, the parents can,
  3. But only if their income is greater than the daughter's income (which is likely because the daughter didn't work.)

Doug M (talk|edits) said:

20 February 2012
Example 1 on page 17 of Pub 596 is exactly this fact pattern.

Mom gets first stab at the apple, if mom does not claim child, Gma can.

As long is there is no disagreement between mom and Gma, then Gma claims with no problem (except if X gets there first, as mentioned by Dan)

And this is only true if Gma's AGI is higher than mom.

Deback (talk|edits) said:

February 20, 2012
We can't determine who can claim the child if the incomes are unknown. So we can't answer this question.

I posted the following earlier and haven't received a response yet from the original poster:

"The Mother did not work last at all in 2011."

I don't know what you meant to say in the above sentence. Did the mother not work at all in 2011 or did the mother not work at all in the last however many months in 2011? Please rewrite that sentence and include the total incomes of both the mother and the grandparents.


The original sentence is incorrect. Did the word "last" get included by mistake, or did the original poster omit an important word (or words) to make a complete sentence? That's all I meant by my first post here. We need more facts!

Dbfs (talk|edits) said:

20 February 2012
Thanks to all responders. Just to make it clear, the Mom did not work at all last year, not a single penny of income of any kind. I agree that Grandparents get the dependent for grandchild. The dad did already efile claiming the child as a dependent. I am going to paper file return for grandparents and claim their grandchild as their dependent. Thanks to all you posters. I do appreciate your sharing of your expertise. Don.

Deback (talk|edits) said:

February 20, 2012
SCCPA and Rupert,

I agree with what you both said, and that's why we need to know the mother's and grandparents' incomes. Sorry if anyone misunderstood my original response.

TaxProCPA (talk|edits) said:

21 February 2012
The statement say "The Mother did not work last at all in 2011; the Grandparents provided support for their Grandchild" The mother had no income in 2011. If the child lived more than six months with the mother in the grandmother's house and the grandmother provided more than 50% support, grandmother may be able to claim the child. Right or wrong?

Fr. Mackelhenry (talk|edits) said:

21 February 2012
It's a necessity. The grandmother she is stuck with him and she should claim him. Better luck next year.

Deback (talk|edits) said:

February 22, 2012
TaxProCPA,

How do you know the mother had no income in 2011? The original statement was:

"The Mother did not work last at all in 2011."

Did the original poster mean to say, "The mother did not work the last [insert number here] months in 2011" or "The mother did not work at all in 2011"? The original statement was incorrect, and I asked for a correction, so the question could be properly answered.

Ddoshan (talk|edits) said:

22 February 2012
Under the qualifying child rules folks just have to get away from the mindset ...if they (in this case the grandmother) provided over half of the support. In the above, grandmother would not have had to provide 1 single dime in support in order for the child to potentially be her qualifying child. There is a real difference.

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