- quote -

Her 2005 lease has a HUD form 50059 attached. Line 53 is
called "Assistance Payment," which is the exact difference
between her payment and the "contract rent" on line 44.
Would that number be smaller if the current building owner
was receiving a benefit like the one you mention above?

Does it make a difference if the assistance payment did not
go directly to her? All of the other examples of this kind
of support listed in IRS publications are direct assistance,
such as food stamps and welfare checks.

Cynthia

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C Cheski <ccheski[at]sbcglobal.net> wrote:

- quote -

To the extent they were used by her (or on her behalf), I'd
think they should be included.

- quote -

Perhaps the actual amount of the HUD subsidy would be
considered support. That amount is likely less than the
difference (and might be $0, in some programs the landlord got
a benefit like a zoning variance in return for including
low-income housing).

Seth

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Forgive me, I've been too wordy.

Here's what I know:

My mother meets the first four dependent tests. I'm now
calculating whether my husband and I supplied more than 50
percent of her support in 2005, which is likely. We know
the basics of what constitutes support, but several
specifics are eluding us.

Herb Smith was very helpful with several items. New
questions have arisen.

1. When I begin to add up the grocery receipts (which we
have kept since she moved in), must I exclude things like
laundry soap, paper towels, and cleaning products?

2. A thread on this group last spring debated whether
medical benefits under Medicare and Medicaid constitute
support. IRS Publication 501 says the following: "Medical
insurance benefits, including basic and supplementary
Medicare benefits, are not part of support." Is it likely
that this takes in Medicaid, too?

3. My mother lived the first seven months of the year in a
senior citizen apartment building and paid HUD-subsidized
rent based on her income. Must we include the difference
between what she paid and the market rate (which appears on
her lease) as support?

I think I am becoming tedious with this thread, but I hate
to call the IRS cold, without any idea of experiences that
other people have had.

Many thanks to all,

Cynthia Cheski

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She may be a dependent as a "qualifying relative" if she meets
these tests:

1. Live in taxpayers house for entire year OR be related as
child, grandchild,....mother, etc.
2. Provide more than 50% of the support
3. Less than $3200 gross income (SS is not part of gross
income test) It does not matter where she lives as long
as the gross income test is met.

Support items to consider - food, lodging, clothing, education,
medical, dental, recreation, transportation, fair rental value
of lodging (not the mortgage payment, but the amount of lodging
cost she would have been required to pay on the open market)

The dependents income is not used to figure support unless the
funds are actually used for support).

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- quote -

Herb Smith wrote:

- quote -

Sorry I didn't give more details earlier. (I wrote a reply
to this post last week, but it hasn't shown up, so I'll try
again here.) Briefly, yes, she meets all the tests. Her only
income is Social Security. We have spent money on furniture,
dental bills, and clothing for her this year in addition to
the fair rental value of the home for five months and
one-third of the grocery costs. Her former apartment was in
a senior citizen subsidized building and her rent was very
low. We calculate the value of her room with us to be about
four times what she was paying for her apartment previously.

- quote -

Some Chicago rentals in similar buildings say utilities
included and some say they are not. That's why I asked.

I used to pay 100 percent of her cable bill when she lived
in her apartment alone. Can that entire bill be listed as
support I provided?

- quote -

Can we deduct only in 2005 because that's when the move took
place, or in future years also?

Many thanks for the help,

Cynthia Cheski

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C Cheski wrote:

- quote -

Is she receiving SS benefits? Does she have taxable income
greater than $3200 for the year? If the latter is true, she
cannot be your dependent.

What makes you think that you provided MORE than half her
support for the whole year, if she only lived with you for
5+ months? Did she support herself for the first half+ of
the year?

- quote -

I would allocate the portion of the bill that pertains to
the number of cable boxes (and remotes) in the house, but
not the basic cable bill (which usually does not depend on
number of TVs in the house). Any added services, such as
Pay-per-View movies should be allocated approprietly. BTW,
wouldn't cable availability be considered in your Fair
Market Rental value?

- quote -

One time expense, for the first year only. Claim the truck
rental and gas.

- quote -

This is an expense of moving. If you pay the bill, claim it
on your spreadsheet.

- quote -

Consider ALL money transferred from her account to be for
HER support. If you find it difficult to track the
expenditures, use the memo section of the checkbook or
Quicken to keep a record. Food purchased for in-house use
should be allocated by the number of persons living in the
house, assuming you pay for all groceries.

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Thank you for the help on fair rental value.

I'm now cranking out a spreadsheet of my mother's 2005
support and calculating what she has paid all year and what
my husband and I have paid since she moved in with us in
late July 2005.

I have read IRS publications 17, 501, and 503, and I found
this: "Other support items. Other items may be considered as
support depending on the facts in each case."

Has anyone had any experience with successfully including
the following items in support:

1. A percentage of cable TV monthly bills as entertainment
(as opposed to the purchase of a TV, which is mentioned in
the IRS publications). The dependent has a TV and a cable
box in her own room. Would the bill be divided by the number
of people who watch TV in the home (3), or the number of TVs
(2)?

2. The expense of moving the dependent. The dependent is not
employed and is not required to file a return, so cannot
deduct the moving expenses on her own. But can we include
the cost of renting the truck and moving her belongings from
one state to another as "support"? How about the gas for the
truck?

3. What about the ongoing expense of a storage locker for
property (furniture, kitchen items)that belongs to the
dependent?

4. I have moved some money directly from her checking
account into my checking account, and the ability to track
whether it was all spent on her support is impossible given
the number of bills I've paid with the comingled funds. Will
this be a problem if the IRS questions the claim of
dependency?

I thank you in advance for any guidance you can offer.

Cynthia Cheski
Chicago

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