JSmith9543 wrote:

- quote -

I should have read the post more carefully before
responding--your ex is wrong for 2004, assuming you have
custody under the agreement (in the unlikely case he has
custody per the agreement, but she lived with you, then he
would be the custodial parent). But I presume that's not
the issue. However, a state court might still rule you
still need to execute the form to "give up" the exemption
when it looks to interpret your divorce decree--that is, the
point of the clause was that you were to waive claiming so
long as IRC Section 152(e) applied. That's an issue only a
family law attorney in your state can truly answer.

In the following year, the 50% test will govern--who
provided over half of your daughter's support. Your ex's
payments and other expenses paid on behalf of your daughter
will be compared with the total cost of your daughter's
support. Note that one item of support sometimes overlooked
is the fair rental value of the living accommodations
provided--if you are providing that, it "counts" as part of
your support.

--
Ed Zollars, CPA
Phoenix, Arizona

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

JSmith9543 wrote:

- quote -

There are two issues involved here, one of which is state
law and one of which is federal law.

Let's deal with the federal law first, at which point we'll
then deal with the state law question. Under federal law,
Section 152(e) is most likely going to be controlling for
2004, though in 2005 it will no longer apply (had your
daughter turned 18 before the end of June it would not have
applied this year, but I digress).

Section 152(e) in general covers the exemption for children
of divorced parents where one parent is ruled to have
custody of the child. Your daughter is your child per this
rule, so the key question becomes if either parent has
custody for over half of the year. The federal courts have
held that custody for this purpose ends at the age the child
is considered emancipated--so no one is deemed to have
"custody" after her birthday in October.

But since her birthday will occur more than halfway through
the year, for this year either or both parents will have
custody for more than half the year. The Tax Court ruled
that, in that case, Section 152(e) controls (see Thomas, TC
Memo 1998-384) as the requirement at Section 152(e)(1)(B)
has been fulfilled.

In that case, if your wife has custody per the divorce
agreement, then she gets to claim the exemption *unless* she
executes a release in the form outlined in the IRS
Regulations. Similarly, if you are the custodial parent,
the same rule applies. If there is joint custody, then it
would appear the parent she was physically living with the
larger portion of the year *before* she reached the age of
majority would be treated as the custodial parent for these
purposes. I say apparently because I don't believe this
fact pattern has been litigated at this point, but it seems
to me the most likely result given the case law we do have.

That's the federal law answer. However, state law will come
into play to determine if, assuming your wife is *not* the
custodial parent whether you would have sign the waiver of
exemption for 2004 (if she is the custodial parent, I think
we've hit the end of the discussion <grin> ). A state court
would need to determine if, under state law your decree
would be interpreted to require you to sign the release for
2004 *OR* whether the fact she is not a minor at December 31
would remove that requirement.

For 2005 the rule will switch--we now have the "standard"
rule that the person who provides over half your daughter's
support is the one to claim her. The "release" option of
Section 152(e) no longer applies, nor does the "custodial"
issue control.

--
Ed Zollars, CPA
Phoenix, Arizona

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

The diplomatic thing to do when both parents are each paying
a large of support is to claim alternate years. And sign a
joint memorandum saying so. Else you spend a lot of time and
ill will quibbling whether it was 40% or 55% etc over soft
numbers like share of the household costs.

-Solomon bar David

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

"JSmith9543" <jsmith9543[at]aol.com> wrote:

- quote -

Whomever provides more than 50% of her support will qualify.
All expenses paid on her behalf qualify. Whomever pays the
expenses gets credit for them.

--
David M. Woods, EA, ChFC, CLU
Woods Financial Services
Norwood, MA 02062
www.woods-financial.com

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

- quote -

You would claim the child as the custodial parent or you may
sign a release form (8332) for the other parent to attach to
their return if you allow that parent to make the claim.

"Jack" - John H. Fisher - TaxService[at]aol.com
Philadelphia, Pa - Atlantic City, NJ - West Wildwood, NJ
My Newsgroups & Boards at: http://members.aol.com/TaxService/index.html

Where Ignorance is bliss, 'tis folly to be wise!=

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

My ex and I are divorced. Our daughter will turn 18 in October. Per our divorce
agreement, ex may claim the 'minor' child. But at the end of 2004, she will not
be a minor - so then who gets to claim her? She resides with me, the mother. Ex
will in fact be paying Child Support until the following June because she is a
senior in high school. Just because he pays a greater percentage in child
support doesn't mean he actually pays more than 50% of her actual expenses? Ex
says then the rule will resort back to who pays greater than 50% of her
care,,,, I say I will claim her as I have primary physical custody. Who's
right? Does the fact that ex pays for things like movies, camps, vacations,
beauty parlor add into his greater than 50% contribution? What if he pays for
her college, but she lives at home with me? who claims then?

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->