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

<much omited - see original post
- quote -

Phil, I did this research several weeks ago. I believe the
issue is what the definition of "subject to any internal
revenue tax". Does that really mean only persons who are
required to file a return? I do not know.

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David Woods <davidwoods[at]verizon.net> wrote:
- quote -

And then they came along, and got the bright idea to let
a married couple file an individual tax return.

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

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Phil Marti wrote:

- quote -

(reprint from the code snipped for brevity......)

- quote -

You have my vote, Phil. I take the same position.

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

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"James Lewis" <jmpj[at]verizon.net> wrote:

- quote -

A dependent, or someone who could be claimed as a dependent,
never gets a personal exemption, regardless of the income
source.

- quote -

Actually it's earned income plus $250, with a minimum of
$800 and a maximum equal to the Single standard deduction.

--
Phil Marti
Clarksburg, MD

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

- quote -

My opinion is that the children are not qualifying relatives
of the BF, and therefore he cannot claim the children as
dependents. The children are the qualifying children of the
mother even though she provides no support. The key point
is that the children do not provide over half of their own
support, not how much support the mother provides. Another
point is that the children are qualifying children of each
other.

The bottom line is that someone who is a qualifying child
of anyone (in this case the mother or sibling) cannot be
a qualifying relative. In this case it seems that the
boyfriend cannot claim the children as dependents because
they are qualifying children of someone else. See Pub. 501,
page 10, Table 5.

Charlie in WA

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The dependents income belongs to him/her. It is reported on
their return, not on your return.

Missy Doyle

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"Kathrin" <markatker[at]hotmail.com> wrote:

- quote -

You don't. That's why they are called Form 1040 INDIVIDUAL
Tax Returns.

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

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Kathrin wrote:

- quote -

Given the age and earned income, your child should have his
own return. The "add it to the parent's return" applies to
under 14 who have only dividend and interest. The return
will be simple to prepare. JOE

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"Kathrin" <markatker[at]hotmail.com> wrote:

- quote -

If the income is in the childs name (ie their SS# is on the
1099 or w-2) you must file a return for them. If the income
is all non earned income, like interest or dividends vs W-2
income, they don't get to claim the exemption because you
must claim it and their standard deduction is $800 plus
earned income. So if its all w-2 income, you wouldn't HAVE
to file a return for the child and the investment income is
not reported. Even if the child doesn't have to file, you
may want to file if any federal income tax was withheld,
because you would get that amount back as a refund.

Mike Lewis, CPA

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Kathrin <markatker[at]hotmail.com> wrote:

- quote -

He earned it, he paid taxes on it. Why do you think it
should go on your return at all?

Seth

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- quote -

You cannot report his income on your return. He has to file
his own return, separate from yours.

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markatker[at]hotmail.com (Kathrin) posted:

- quote -

No. You cannot file your child's income with your return.
You should file showing your child as a dependent -- and
your child should file a separate return. He/she, with only
"around" $2K income, will still be permitted the standard
deduction of the amount earned + $250 (up to $5,000) -- so
the result will be a refund of all FIT withheld.

Note: If filing on paper, the 1040-EZ would accommodate the
child's return very easily, with the calculation on the
back.

Bill

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Kathrin wrote:

- quote -

First, this is HIS income and does NOT go on your tax
return. If he had money withheld, HE should file a return to
get back a refund of his withholding.

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"Kathrin" <markatker[at]hotmail.com> wrote:

- quote -

No. In the taxman's eyes he's all grown up now and files
his own return to get a refund of any income tax withheld.
(If no income tax was withheld, he doesn't have to file
unless he had more than $250 of nonwage income.) Make sure
he checks the box on his return that says he's a dependent
of someone else.

--
Phil Marti
Clarksburg, MD

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"Kathrin" <markatker[at]hotmail.com> writes:

- quote -

You don't!

- quote -

No.

Once a child turns 14 you cannot put his income on the
parents' return. And even before then, you can only do that
if all his income is investment income, and even then, only
if there's no Schedule D stuff.

He should file his own return. If the $2K is his only
income he doesn't have to file, but since his tax liability
will be zero, he should file to get a refund of the income
tax withheld.

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

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Just to keep everything in one place, here's the scenario.
Household consists of unmarried boyfriend (BF) and
girlfriend (GF) and GF's children. BF is the only member of
the household with income. GF receives child support, but
children have lived in this household (without formal
placement as foster children) the entire year. BF has
contributed more than half the cost of maintaining the
household and more than half the support for everyone in the
household.

Settled issues:
1. GF is BF's dependent.
2. BF does not qualify for Head of Household filing status,
child tax credit or child care credit.
3. Children are not qualifying children for BF with respect
to EIC.

Unsettled issue: Can BF claim dependency exemptions for the
children? They are clearly not his qualifying children, but
can they be qualifying relatives for dependency?

Here's section 152 as revised by P.L.'s 108-311 and 109-135:

(a) IN GENERAL- For purposes of this subtitle, the term
'dependent' means--

(1) a qualifying child, or

(2) a qualifying relative.

(b) EXCEPTIONS- For purposes of this section--

(1) DEPENDENTS INELIGIBLE- If an individual is a dependent
of a taxpayer for any taxable year of such taxpayer
beginning in a calendar year, such individual shall be
treated as having no dependents for any taxable year of such
individual beginning in such calendar year.

(2) MARRIED DEPENDENTS- <snipped--irrelevant
(3) CITIZENS OR NATIONALS OF OTHER
COUNTRIES-<snipped--irrelevant
(c) QUALIFYING CHILD- For purposes of this section--

(1) IN GENERAL- The term 'qualifying child' means, with
respect to any taxpayer for any taxable year, an
individual--

(A) who bears a relationship to the taxpayer described in
paragraph (2),

(B) who has the same principal place of abode as the
taxpayer for more than one-half of such taxable year,

(C) who meets the age requirements of paragraph (3), and

(D) who has not provided over one-half of such individual's
own support for the calendar year in which the taxable year
of the taxpayer begins.

(2) RELATIONSHIP- For purposes of paragraph (1)(A), an
individual bears a relationship to the taxpayer described in
this paragraph if such individual is--

(A) a child of the taxpayer or a descendant of such a child,
or

(B) a brother, sister, stepbrother, or stepsister of the
taxpayer or a descendant of any such relative.

(3) AGE REQUIREMENTS <snipped--irrelevant
(4) SPECIAL RULE RELATING TO 2 OR MORE CLAIMING QUALIFYING CHILD-

(A) IN GENERAL- Except as provided in subparagraph (B), if
(but for this paragraph) an individual may be and is claimed
as a qualifying child by 2 or more taxpayers for a taxable
year beginning in the same calendar year, such individual
shall be treated as the qualifying child of the taxpayer who
is--

(i) a parent of the individual, or

(ii) if clause (i) does not apply, the taxpayer with the
highest adjusted gross income for such taxable year.

(B) MORE THAN 1 PARENT CLAIMING QUALIFYING CHILD- If the
parents claiming any qualifying child do not file a joint
return together, such child shall be treated as the
qualifying child of--

(i) the parent with whom the child resided for the longest
period of time during the taxable year, or

(ii) if the child resides with both parents for the same
amount of time during such taxable year, the parent with the
highest adjusted gross income.

(d) QUALIFYING RELATIVE- For purposes of this section--

(1) IN GENERAL- The term 'qualifying relative' means, with
respect to any taxpayer for any taxable year, an
individual--

(A) who bears a relationship to the taxpayer described in
paragraph (2),

(B) whose gross income for the calendar year in which such
taxable year begins is less than the exemption amount (as
defined in section 151(d)),

(C) with respect to whom the taxpayer provides over one-half
of the individual's support for the calendar year in which
such taxable year begins, and

(D) who is not a qualifying child of such taxpayer or of any
other taxpayer for any taxable year beginning in the
calendar year in which such taxable year begins.

(2) RELATIONSHIP- For purposes of paragraph (1)(A), an
individual bears a relationship to the taxpayer described in
this paragraph if the individual is any of the following
with respect to the taxpayer:

(A) A child or a descendant of a child.

(B) A brother, sister, stepbrother, or stepsister.

(C) The father or mother, or an ancestor of either.

(D) A stepfather or stepmother.

(E) A son or daughter of a brother or sister of the
taxpayer.

(F) A brother or sister of the father or mother of the
taxpayer.

(G) A son-in-law, daughter-in-law, father-in-law,
mother-in-law, brother-in-law, or sister-in-law.

(H) An individual (other than an individual who at any time
during the taxable year was the spouse, determined without
regard to section 7703, of the taxpayer) who, for the
taxable year of the taxpayer, has the same principal place
of abode as the taxpayer and is a member of the taxpayer's
household.

(3) SPECIAL RULE RELATING TO MULTIPLE SUPPORT AGREEMENTS-
<snipped--irrelevant
(4) SPECIAL RULE RELATING TO INCOME OF HANDICAPPED
DEPENDENTS- <snipped--irrelevant
(5) SPECIAL RULES FOR SUPPORT- For purposes of this subsection--

(A) payments to a spouse which are includible in the gross
income of such spouse under section 71 or 682 shall not be
treated as a payment by the payor spouse for the support of
any dependent, and

(B) in the case of the remarriage of a parent, support of a
child received from the parent's spouse shall be treated as
received from the parent.

(e) SPECIAL RULE FOR DIVORCED PARENTS-

(1) IN GENERAL- Notwithstanding subsection (c)(1)(B),
(c)(4), or (d)(1)(C), if--

(A) a child receives over one-half of the child's support
during the calendar year from the child's parents--

(i) who are divorced or legally separated under a decree of
divorce or separate maintenance,

(ii) who are separated under a written separation agreement,
or

(iii) who live apart at all times during the last 6 months
of the calendar year, and

(B) such child is in the custody of 1 or both of the child's
parents for more than one-half of the calendar year, such
child shall be treated as being the qualifying child or
qualifying relative of the noncustodial parent for a
calendar year if the requirements described in paragraph (2)
are met.

(2) REQUIREMENTS- For purposes of paragraph (1), the
requirements described in this paragraph are met if--

(A) a decree of divorce or separate maintenance or written
separation agreement between the parents applicable to the
taxable year beginning in such calendar year provides that--

(i) the noncustodial parent shall be entitled to any
deduction allowable under section 151 for such child, or

(ii) the custodial parent will sign a written declaration
(in such manner and form as the Secretary may prescribe)
that such parent will not claim such child as a dependent
for such taxable year, or

(B) in the case of such an agreement executed before January
1, 1985, the noncustodial parent provides at least $600 for
the support of such child during such calendar year. For
purposes of subparagraph (B), amounts expended for the
support of a child or children shall be treated as received
from the noncustodial parent to the extent that such parent
provided amounts for such support.

(3) CUSTODIAL PARENT AND NONCUSTODIAL PARENT- For purposes
of this subsection--

(A) CUSTODIAL PARENT- The term 'custodial parent' means the
parent with whom a child shared the same principal place of
abode for the greater portion of the calendar year.

(B) NONCUSTODIAL PARENT- The term 'noncustodial parent'
means the parent who is not the custodial parent.

(4) EXCEPTION FOR MULTIPLE-SUPPORT AGREEMENTS- This
subsection shall not apply in any case where over one-half
of the support of the child is treated as having been
received from a taxpayer under the provision of subsection
(d)(3).

(f) OTHER DEFINITIONS AND RULES- For purposes of this
section--

(1) CHILD DEFINED-

(A) IN GENERAL- The term 'child' means an individual who
is--

(i) a son, daughter, stepson, or stepdaughter of the
taxpayer, or

(ii) an eligible foster child of the taxpayer.

(B) ADOPTED CHILD- In determining whether any of the
relationships specified in subparagraph (A)(i) or paragraph
(4) exists, a legally adopted individual of the taxpayer, or
an individual who is lawfully placed with the taxpayer for
legal adoption by the taxpayer, shall be treated as a child
of such individual by blood.

(C) ELIGIBLE FOSTER CHILD- For purposes of subparagraph
(A)(ii), the term 'eligible foster child' means an
individual who is placed with the taxpayer by an authorized
placement agency or by judgment, decree, or other order of
any court of competent jurisdiction.

(2) STUDENT DEFINED- The term 'student' means an individual
who during each of 5 calendar months during the calendar
year in which the taxable year of the taxpayer begins--

(A) is a full-time student at an educational organization
described in section 170(b)(1)(A)(ii), or

(B) is pursuing a full-time course of institutional on-farm
training under the supervision of an accredited agent of an
educational organization described in section
170(b)(1)(A)(ii) or of a State or political subdivision of a
State.

(3) DETERMINATION OF HOUSEHOLD STATUS- An individual shall
not be treated as a member of the taxpayer's household if at
any time during the taxable year of the taxpayer the
relationship between such individual and the taxpayer is in
violation of local law.

(4) BROTHER AND SISTER- The terms 'brother' and 'sister'
include a brother or sister by the half blood.

(5) SPECIAL SUPPORT TEST IN CASE OF STUDENTS- For purposes
of subsections (c)(1)(D) and (d)(1)(C), in the case of an
individual who is--

(A) a child of the taxpayer, and

(B) a student,

amounts received as scholarships for study at an educational
organization described in section 170(b)(1)(A)(ii) shall not
be taken into account.

(6) TREATMENT OF MISSING CHILDREN- <snipped--irrelevant
(7) CROSS REFERENCES-

For provision treating child as dependent of both parents
for purposes of certain provisions, see sections 105(b),
132(h)(2)(B), and 213(d)(5).'.

The section 7701(a)(14) definition of taxpayer is also
pertinent:

"The term 'taxpayer' means any person subject to any
internal revenue tax."

I reach the conclusion that the children are BF's qualifying
relatives and he is entitled to their dependency exemptions.
They meet all the section 152(d) requirements, including
the 152(d)(1)(D) requirement that they not be qualifying
children of any other taxpayer for the year in question.

Please feel free to attack my conclusion. I anticipate
seeing this issue at my VITA site, and that is the moment
when I want to be sure I'm right.

Thanks.
--
Phil Marti
Clarksburg, MD

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I am head of household with a 17 year old dependent (child),
who earned around 2K last year and paid taxes on it. I am
not quiete sure how to add his income to my return (I am
using tax act) Would I just add another W2 to my return?
Thanks

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