"A.G. Kalman" <glendale202-mtm[at]yahoo.com> wrote:
- quote -

This dealt with the circumstances under which two persons
living under the same roof can successfully claim that
they're maintaining two households (if they could do this,
they might have a shot at legitimately claiming HOH for
each). A simple summary is that it is not impossible but is
always a matter of "all the facts and circumstances".

I don't see it working here. The two bought the house
"together" and are remaining unmarried not because they wish
to remain independent but to avoid consequences. I don't see
how their situation can be stretched to create two
households.

--
Chris Green

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D. Stussy wrote:
- quote -

What you say is true but I'm not sure of its relevance to my
post. I was responding to the original post that stated
there were two single individuals each with a dependent
child living in the same home. The SCA addresses that
situation and explains what is required to have two
households in the same building.

Specifically, the SCA says:

Issue
(1) Whether two unmarried individuals, each living with
their own dependent children in a shared dwelling, can each
claim head of household filing status?

This certainly sounds like the situation that was presented.

--
Alan
http://taxtopics.net

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L K Williams wrote:
- quote -

Based on SCA 1998-041 there are occasions when head of
household can be claimed under certain conditions. The
conclusion was that "determination of whether two unmarried
individuals, each living with their own dependent children
in a shared dwelling, may each claim head of household
filing status is not a matter simply determined by physical
boundaries, but by all the facts of a case."

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A.G. Kalman wrote:

- quote -

That ruling was really a finding that there were TWO
households on the same property.

There can still only be ONE head of a given household.

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Lois wrote:

- quote -

Same household: No.

Using same household as mailing address, but one lives
elsewhere: OK, but will probably mean that someone will
have a return selected for audit. During my IRS days, I
actually audited this type of arrangement (except that they
were actually legally married at the time, but separate due
to work issues).

- quote -

I don't see where in 2002 you said that they filed HoH for
the SAME household. You only make it clear that it's the
same household in 2003.

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Ernie Betts wrote:

- quote -

Tax schedules are different for HOH and single.

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kamlet[at]panix.com (Arthur Kamlet) writes:

- quote -

If they needed a new roof? I didn't spend any time trying
to dream up scenarios, but I'm sure there are some.

Phil Marti
Topeka, KS

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"Lois" <lois[at]nospam[at]prodigy.net> wrote:

- quote -

Basically, I agree with the other posters that you cannot
have two heads of one household. I don't see how they can
sustain an argument that both are entitled to file HOH.

As for amending 2002, I disagree with the other posters. It
is the client's responsibility to decide whether or not to
file an amended return. Unless they specifically engage you
to prepare an amended return, you have no authority to do so
and have no basis for billing them. You DO have a
responsibility to explain to them why an amendment is called
for and the implications of filing one. In other words, you
need to explain why both cannot file HOH and how much they
might owe if they amend one return.

You probably ought to make at least rough calculations of
the different results based on which return is amended.
But, until the clients agree to amend the returns and
instruct you to prepare the form, your responsibility ends
when you tell them what they should do.

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Lois wrote:

- quote -

See SCA 1998-041 Whether two unmaaried individuals, each
living with their own dependent children in a dhared
dwelling, can each claim HOH filing status; what expenses
are considered in determining who paid more than one-half
cost; and what is an acceptable verification of expenses for
the cost of maintaining a household.
http://www.irs.gov/pub/irs-sca/1998-041.pdf

--
Alan
http://taxtopics.net

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Phil Marti <philmarti[at]aol.com> wrote:
- quote -

Not sure how to make the numbers work.

The one itemizing real estate taxes and mortgage interest
would seem to be the one who paid more than hald the
household costs?

__
Art Kamlet ArtKamlet [at] AOL.com Columbus OH K2PZH

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Lois wrote:

- quote -

Technically, the one who paid more than 50% of the costs of
keeping up the home should be the HOH, but your method
works, too. If they have one household (as opposed to a
roommate relationship where they split housing and utilities
and pay for their own food and amusements), there can only
be one HOH.

- quote -

You should certainly tell them that they're obligated to
amend if they only had one household. They get to choose
whether to do so.

If it were my personal return, I'd run the numbers both
ways, then decide who gets to be HOH (assuming the gifting
to make it all balance out was under $11K). If it were my
client's return, I'd make them pick which way to go before
starting the returns, and not even consider seeing whether
the other one being HOH would be a better answer.

Phoebe

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"Lois" <lois[at]nospam[at]prodigy.net> wrote:

- quote -

By definition, they can not BOTH be providing MORE than half
of all household costs. As long as the house is not divided
into two, separate apartments for the two families. Sounds
like you need to amend the 2002 return also.

The determination of WHO should claim the HOH status is not
based on income, but who pays the most toward household
expenses, including food eaten in the premises. DO NOT
include education, clothing, or transportation in this
totalization. For help, see the worksheet in Pub 501. Don't
confuse "household costs" with "support" provided to your
child.

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"Lois" <lois[at]nospam[at]prodigy.net> writes:

- quote -

If you google the topic in this group you'll get lots of
opinions. They sound like one household to me, and one
household can have only one head.

- quote -

Not necessarily, especially since their incomes are so
close. See more below.

- quote -

They need to discuss this with a property attorney.
Marriage doesn't automatically create liability for the
spouse's pre-existing separate debts, but creditors may be
able to reach community property to satisfy those debts.

- quote -

There's not a lot you can do about 2003, but lots of advice
for 2004 if they're not going to marry. Maybe they should
arrange things so that one itemizes and one takes standard
deduction. He pays the deductible household expenses and
she pays the nondeductible ones like utilities, repairs,
food, etc. Then have the one that isn't going to itemize
file HofH for the higher standard deduction, assuming you
can make the numbers work.

- quote -

I would.

Phil Marti
Topeka, KS

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"Lois" <lois[at]nospam[at]prodigy.net> wrote:

- quote -

If they itemize, HOH/single makes no difference if they have
over $7000/$4750 in itemized deductions.

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Facts:

Unmarried couple, each with a dependent child living
(part-time) in same household. They purchased a home
together in 2003 (both names on the loan). Both filed
returns as HOH in 2002 with H&R Block. She earned $52,000,
he earned $48,000 per year.

It seems to me like HOH for both in 2003 is not OK, but I'm
curious to hear other opinions on the matter. This will be
the first year that they can itemize deductions. It seems
like the one with the greater income would be the HOH and
the other should file as SINGLE.

To complicate things, the man owes back child support
(~$35,000) so the California Franchise Tax Board is keeping
any refunds that he might get. Woman is also paying back
taxes owed from a previous marriage.

They don't want to get married if woman will become jointly
liable for his back child support obligation.

Questions:

Any thoughts on what I should look at in preparing their
returns to minimize their legal tax liability? I'm also
worried about last year's returns since both filed as HOH.
Shouldn't I amend that as well?

Lois

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