Dick Adams wrote:

- quote -

You have indicated in another post that you intend to hold
the SSDI payments he receives in an investment account until
he is old enough to use the money wisely(?). If you do
this, and he doesn't get to spend the money on himself, you
would still be providing over half the support and would be
able to claim the exemption.

Whether or not this income is taxable to him depends on the
amount. The usual rules for how much social security is
taxed would apply.

Lanny K. Williams, CPA
Nawarat, Williams & Co., Ltd.
Income Tax Services for Expatriate Americans

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Dick Adams wrote:

- quote -

Not unless 1/2 the benefit + all his other income exceeds
$25,000 for the year. Same taxation rules as for regular
SSI, using same worksheet in 1040 instructions.

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Dick Adams <rdadams[at]smart.net> wrote:
- quote -

Does he have much other income?

If half his SSDI plus all other income is less than $25,000
has no taxable SSDI.

Otherwise there is a worksheet at the back of Pub 915 that
lets him assume he received his SSDI income in the year it
was for, and if that's a better way to go, and it can be,
that's what he uses. It can wipe out any taxable SSDI.

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

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"Dick Adams" <rdadams[at]smart.net> wrote:

- quote -

Short answer: probably not. Accurate answer: do the
worksheet for line 20 of the 1040. (It's his income, not
yours, even though it's probably payable to you as
custodian.)

--
Phil Marti
Clarksburg, MD

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- quote -

You only lose him if he actually spends the money for his
own support. If he invests it, it's not support. So have him
put it in a savings account, mutual fund, or other
investment.

Bob Sandler

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Phil Marti <prm20871[at]verizon.net> wrote:
- quote -

Thanks. Phil.

Now is the SSDI taxable to Joshua in the year received?

Dick

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Dick Adams <rdadams[at]smart.net> wrote:

- quote -

Not if he banks the money.

If he spends it on his own support, then it counts towards
calculating whether he provides most of his support. But if
he puts most of that money in the bank so that you provide
most of his support, you get to claim him as a dependent.

Repeat the following mantra 26 times:

Facts & circumstances.
Facts & Circumstances.
...

And so far as I know, there's nothing improper about a
little bribe to encourage him to bank that money :^)

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

Moderator:
Bribe, hell. I have absolute control over this money and
it is going into no-load mutual funds for his education.

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Dick Adams wrote:

- quote -

Your son would fail the test only if he uses the funds to
support himself and you discover that he has provided more
than half of his own support in the year.

--
Alan
http://taxtopics.net

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"Dick Adams" <rdadams[at]smart.net> wrote:

- quote -

Only if he spends more on his support for the year than you
do. If he banks the money it doesn't count as support.

--
Phil Marti
Clarksburg, MD

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Dick Adams wrote:

- quote -

I think it depends on what you (or he) does with the money
received. If it is "socked away" into a savings account for
future educational needs, it would not be considered
"support provided by a third party" and you could continue
to claim him as your dependent. If he is forced to use the
money to pay for his lodging, meals, clothing, etc
(including buying and supporting a car) then he likely is
not your dependent for that year.

You are the parent, do the right thing!

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"Dick Adams" <rdadams[at]smart.net> wrote:

- quote -

My recollection is that it won't unless HE used it in
support for himself. If he is still a minor, the income test
doesn't apply.

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

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I am now on Social Security Disability Income and that means
a two year retroactive payment to me and to Joshua. When
Joshua receives his income, it will obviously exceed our
support of him - so do we lose him as a dependent for a year?

DIck

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