- quote -

I'll duck the first one but venture to say on the second
that your brother is your dependent. Since he's your
brother, to be a qualifying child he must be under 24 (under
19 if not a full-time student) and live with you for at
least half the year. You don't mention his age; from the
tone of your post I'm guessing that he is older than 24 and
didn't live with you. To be a qualifying relative his gross
income must be less than $3300 (the amount of the personal
exemption) and you must provide over half his support. Since
he's your brother he does NOT have to live with you to be
your qualifying relative. The only question is whether or
not Medicaid reimpursement counts as income, and I don't
think that it does. See Pub 17 p. 28 ff
(http://www.irs.gov/pub/irs-pdf/p17.pdf)

--
John D. Goulden

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1. If the car was over 25 years old, then it may quite
possibly qualify as an "antique" and therefore a collectible
under Sec. 408(m)(2)(B). Particularly since it was
apparently bought for its value as a particular type of car,
and not for its value as a parts car or as scrap metal.

The generally accepted (non-tax) definition of an antique
car appears to be a car that is 25 years or older. The IRS,
however, does not appear to have ruled on this issue, so it
might be worth a quick phone call to whatever branch handles
collectibles issues under 408(m).

2. Assuming brother spent no other amounts last year other
than the $5,000 and the $10,000 in medicaid-reimbursed
expenses, brother's cost of support was $15,000. Since
Taxpayer only provided 1/3 of that support ($5,000/$15,000 =
1/3), Taxpayer cannot claim brother as a dependent.

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

Two quick tax questions for those who kept their brains
sharp during the "off season"

1. Taxpayer had a rusty old hulk of a sports car in their
garage, has always planned to restore it, but never had the
time. Taxpayer has restored a couple of other collectible
cars in the past. Paid about $0 for it, and had it towed to
their house 20 years ago at a cost of $100.

A firm that restores cars for collectors just paid taxpayer
$17,000 for the rusty hulk.

"Collectible" capital gains rate of 25%?

2. Taxpayer's brother had a heart attack a few years ago and
is debilitated from heart disease. Lives in a shack in
another state on about nothing. Taxpayer paid brother about
$5,000 last year which was brother's only direct support,
but brother incurred about $10,000 in Medicaid reimbursed
medical expenses. Brother is single and does not file tax
return.

Can brother be a dependent?

Merci!

Tom C.

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >