It comes down to how the IRS defines taxpayer. H&R Block
received clarification from the IRS that taxpayer
essentially means anyone living in the US that would have to
pay taxes if they were to have income. This includes just
about everyone except foreign visitors with excluded income.

So in this example, the children are the QC of the
girlfriend and therefore the BF cannot claim them for
anything, including dependency.

Consider the following situation:
Two siblings, ages 10 and 12, are orphaned and a caring
neighbor takes them in and supports them all year (12
months). Because they are qualifying children of each
other, they cannot be qualifying relatives for the neighbor,
and he cannot claim them on his tax return for anything.

Do you think Congress intended this?

Dennios

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- quote -

You lost me there.
Do explain what you mean.

ChEAr$,
Harlan Lunsford, EA n LA
Sun 29 Jan 2006

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"Rick Merrill" <rickZERODOTmerrill[at]NOSPAMgmail.com> wrote:

- quote -

I can't see how common law marriages got into the picture
unless the term "relatives" is causing some confusion. For
reasons known only to people other than I, they decided to
call those f/ka qualfying persons qualifying relatives even
if they're not related by blood or marriage.

--
Phil Marti
Clarksburg, MD

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Harlan Lunsford wrote:
- quote -

Harlan, wouldn't that be true ONLY in a "common law" state?

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Harlan Lunsford wrote:
- quote -

I'm going to hang my hat on Harlan's hat rack. The code
does say: The term "qualifying child" means, with respect to
any taxpayer for any taxable year ......

No taxpayer... no qualifying child. Makes sense to me and
seems reasonable. Not much of an audit trail
either.................

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A.G. Kalman wrote:
- quote -

I've given this some additional thought and reread the code.
I think Congress and/or the IRS is going to have to provide
some guidance. That said, it seems that the plain language
states that you can not have a QR if that relative is also
the QC to someone else. Separately, the code says that if
you are either the QC or QR of someone else, you can not
claim any of your own QRs or QCs. It does not say that if
you are someone else's dependent you can not have a QC. In
fact some of the literature refers to a dependent having a
QC. See page 25 of IRS Pub 17, left column under Dependent
Taxpayer Test. Excerpt follows:

If you could be claimed as a dependent by another person,
you cannot claim anyone else as a dependent. Even if you
have a qualifying child or qualifying relative, you cannot
claim that person as a dependent.

Notice it says "even if you have a QC or QR."

It certainly seems that in this instance, no one would get
to claim the dependent's QC. It is not clear to me that
this was the intent of the new uniform definition.

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A.G. Kalman wrote:
- quote -

(snipped).... except that......

If the girlfriend has no income and doesn't file a tax
return, she by default has no qualifying children. ergo,
they CAN be qualified relatives of the boyfriend.

That's my story, and I'm sticking to it.

ChEAr$,
Harlan Lunsford, EA n LA
Fr 27 jan 2006 17:39 est

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Phil Marti wrote:

- quote -

I believe this is the correct interpretation; it's the same
one I came to for a same-sex couple in similar
circumstances. The younger child in that situation was
being second-parent adopted by the one with income, and the
best I could come up with is that the "placed for adoption"
rule might work.

Phoebe

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"CDH Taxman" <chenson[at]providencefinancial.net> wrote:

- quote -

We have no disagreement about any of the five issues except
dependency. The children definitely do not qualify BF for
the other four.

--
Phil Marti
Clarksburg, MD

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

- quote -

I don't believe they are qualified children, because they don't
pass the relationship test.

They would qualify as relatives since they lived in the same
household for the entire year.

I'd say they would not be eligible for the Child Tax Credit
or the EIC.

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Phil Marti wrote:

- quote -

The children are the QC of the mother. As such they can not
be the QR of the boyfriend because one requirement to be a QR
is that the children can not be the QC of someone else.
In 2004, the boyfriend could have claimed them. In 2005, he
can't. I've already seen a similar situation with grandparents
supporting their daughter and her grandchild. Unfortunately,
the daughter and grandchild do not live with the grandparents.
That would have worked in 2004, but doesn't work in 2005 as
the grandchild is the QC of the mother and can't be the QR to
the grandparents.

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We're having a sane disagreement on the unmoderated board
that we haven't been able to resolve yet. Here's the
situation:

We have a household consisting of boyfriend (BF) and
girlfriend (GF) and her children throughout 2005. BF
supports the household for the entire year--no one else has
any income source, and the biodad of the children hasn't
been seen or heard from in years. The children meet all of
the really uniform (not specific to just one tax benefit)
requirements for being qualifying children.

Our problem is the dependency exemption with respect to the
children. GF definitely qualifies as BF's dependent, thus
she cannot have any qualifying child dependents.

The disagreement is whether the children can be qualifying
relatives for the dependency exemption for BF. One
conclusion is that since they meet the uniform requirements
for qualifying children they cannot be qualifying relatives
for anyone with respect to the dependency exemption. The
other is that since they are not qualifying children for
anyone for the dependency exemption, they are available for
qualifying relative consideration.

When I have time I'm heading for the Code, but I'm hoping
someone here has already been there over this issue and can
save my neighbors from the cursing.

--
Phil Marti
Clarksburg, MD

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