"WD" wrote:

- quote -

I think I see the problem. Up until now you've been saying that GF had
about $2,400 in 2007 income. You were just talking about her wages, right?
The 1099-C complicates the picture. IF it is gross income to GF she doesn't
qualify as your dependent because she fails the gross income test.

As for the fireman's wife/CPA, there are lots of brilliant CPA's who know
nothing about taxes. (Her without question wrong advice regarding Head of
Household filing status makes me think she's in that category, at least as
far as the tax part is concerned.)

But maybe she can be helpful. The 1099-C amount is not automatically gross
income to GF. Specifically, it isn't taxable income to her if, at the time
the debt was cancelled, she was insolvent. This is a concept that any
competent CPA should be able to explain to you.

If it turns out GF doesn't have to include the 1099-C amount in income, your
choices are as I stated before. If she does have to include the income,
your choices become:

Scenario 1:

GF files Single claiming daughter as qualifying child dependent and for
EITC. In addition to the refund of the $148.91 withheld she'd get $859
Earned Income Credit.

You file Single with no dependents.

Scenario 2:

GF files Single without claiming daughter in any way and gets a refund of
her $148.91.

You file Single claiming daughter as a qualifying relative dependent.

- quote -

There's no nice way to put it, she's just flat-out wrong. Walk her through
the discussion of the HofH qualifying person in Pub 501 and ask her to show
you how someone not related to you by blood, marriage, or official placement
as a foster child can be a qualifying person. Hint: the test is different
than the test for a dependent.

- quote -

Daughter's father is irrelevant in all aspects of the discussion since he
doesn't pay support and she doesn't live with him.

--
Phil Marti
Clarksburg, MD

--
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In article <qd60s3t0mivp2sinqrnaqjitb4aemlnivb[at]4ax.com> ,
WD <wd0809[at]yahoo.com> wrote:

- quote -

With all due respect, your CPA friend doesn't know what she is talking
about. I am not a CPA or any other kind of tax expert, but even I can
read the plain text rules in the IRS publications.

PUB 17 for example, under

Head of Household (From PUB 17 Page 22 Chapter 2 Filing Status)

Clearly says that to claim HOH you have to have "A ³qualifying person²
who has lived with you in the home for more than half the year."

It then explains that a ³qualifying person² can only be either a
qualifying child or some other qualifying relative. (See table 2-1 in
Pub 17)

It then goes on to describe, in detail, the tests for a qualifying
child, which are:

Qualifying Child (Pub 17-Page 26 Chapter 3 Personal Exemptions and
Dependents)

There are five tests that must be met for a child
to be your qualifying child. The five tests are:

1. Relationship,
2. Age,
3. Residency,
4. Support, and
5. Special test for qualifying child of more
than one person

Relationship Test

To meet this test, a child must be:

€ Your son, daughter, stepchild, foster child,
or a descendant (for example, your
grandchild) of any of them, or

€ Your brother, sister, half brother, half sis-
ter, stepbrother, stepsister, or a descen-
dant (for example, your niece or nephew)
of any of them.

There is no need to go on because you are NOT related to your GF's
child, so the child CANNOT be YOUR qualifying child.

Take this to you CPA friend and have her look it up before you make a
mistake in filing your return (I know first hand that HOH IS one item
that raises flags with the IRS).

--
-Ernie-

--
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On Fri, 22 Feb 2008 16:51:17 EST, "Phil Marti" <prm20871[at]verizon.netwrote:

- quote -

BUT she recieved a form 1099-c cancellation of debt for 1761.19
I was told by that Firefighters wife (the CPA) because of that 1099-c
I cannot claim her as that shows as income.
Now .....(if she is wrong in your opinion) if I can claim her (and
her daughter) that would mean they cannot claim themselves, correct?


- quote -

There again going on what firefighters wife (cpa) told me, she said I
could do this. I even called her back two days ago to verify what she
told me prior.
- quote -

support test ETC
- quote -

OK again, her Dad does not file taxes (according to ex wife , my GF)
he owes a lot and would go to jail when they catch up to him. His
latest plan was to leave the country.

I really appreciate your patience with me.
- quote -

--
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"Alan" wrote:

- quote -

Don't know how I missed that. It's directly on-point to OP's situation.

Thanks.

--
Phil Marti
Clarksburg, MD

--
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Phil Marti wrote:
- quote -

It's in Pub 501, top of third column on page 13 with three examples.

--
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WD wrote:
- quote -

Here is a link that may be helpful:

http://www.irs.gov/pub/irs-drop/n-08-05.pdf

If this fits your situation, you would still need to pass
the, "and your relationship must not violate local law"
reference of Pub 17, Table 3.1 (e.g. state and local laws
regarding cohabitation.)

--
<< ------------------------------------------------------- > << 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 (2007) - All rights reserved. > << ------------------------------------------------------- >

"WD" wrote:

- quote -

Whether or not to claim GF as a dependent is the one no-brainer you have.
You are the only person who can claim her personal exemption, and there's no
harm to anyone if you do. What led you to this conclusion? A specific Pub
501 reference would help us show you where you went wrong.

- quote -

As everyone here told you from the start you cannot under any scenario file
as head of household. Period. There is no "qualifying person" in your
household. Again, if you could tell us what led you to this conclusion it
would help us disabuse you of it.

- quote -

If you follow the flowchart in Pub 501 for a "qualifying relative"
dependent, that's where the daughter fits in. The only issue would be
whether she's her mother's qualifying child, in which case she would not be
available to you as a qualifying relative.

However, the IRS issued a notice recently (not reflected in Pub 501) saying
that if all persons who could claim her as a qualifying child are not
required to file a return, she is not anybody/s qualifying child. If you
search at the IRS site on "qualifying child" you'll probably find a link to
this notice. In your case her mother is the only person who could possibly
claim her as a qualifying child, and her mother has no filing requirement.
Thus she's nobody's qualifying child and is available to you as a qualifying
relative.

--
Phil Marti
Clarksburg, MD

--
<< ------------------------------------------------------- > << 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 (2007) - All rights reserved. > << ------------------------------------------------------- >

On Thu, 21 Feb 2008 17:48:41 EST, Harlan Lunsford
<hnslunsford[at]bellsouth.net> wrote:

- quote -


Well after all kinds of research, it appears my best scenario is:

Do not claim GF (although her income was only 2400, she had a debt
reducxtion form for 1700)

Claim Gf's daughter as a dependent, and me head of household.

I still cannot find anything that states I can claim GF's daughter
but I was told I can.
She lived with us all year (2007) only made about $600, and her Dad
paid zero child support.

So if anyone thinks this is wrong please let me know.
And if anyone can point me to an exact spot in a Publication showing
where I can do this with GF's daughter I would appreciate it for my
peace of mind.
Thanks to all

--
<< ------------------------------------------------------- > << 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 (2007) - All rights reserved. > << ------------------------------------------------------- >

Phil:
- quote -


It's amazing. And yes, also according to Pub. 596. To get EIC
without qualifying child, you yourself cannot be a qualifying child
nor a dependent of someone else. But when you do have a qualifying
child, it's only the first restriction. Amazing. And a good
opportunity for some tax planning.

-Doug

--
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WD wrote:

(snippeeeedddd.)

- quote -

She is correct. IRS put out clarifying information on this very point
late last year, IF memory serves.

ChEAr$,
Harlan Lunsford, EA n LA

--
<< ------------------------------------------------------- > << 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 (2007) - All rights reserved. > << ------------------------------------------------------- >

"WD" wrote:

- quote -

Also check out the EITC for your girlfriend to see if it's better not to
claim the daughter even if you can.

--
Phil Marti
Clarksburg, MD

--
<< ------------------------------------------------------- > << 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 (2007) - All rights reserved. > << ------------------------------------------------------- >

Phil Marti wrote:
- quote -

Table 36.1 in 2007 Pub 17 "Earned Income Credit in a Nutshell"(1) is a
really easy-to-use, concise list of the rules (Chapter 36 itself is EIC
in detail).

The scenario where a dependent can still use a qualifying child for EIC
makes for a challenging test question for those learning tax preparation.

-Mark Bole

(1) is the IRS allowed to use phrases like "in a nutshell"?

--
<< ------------------------------------------------------- > << 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 (2007) - All rights reserved. > << ------------------------------------------------------- >

On Wed, 20 Feb 2008 20:30:34 EST, Mark Bole <makbo[at]pacbell.net> wrote:

- quote -

Yes I understand that completey. (just get a little frustrated, we
have been to hell through all this) I am trying to gain knowledge, so
I do not do something I am not entitled to do.

I went to a firefighters wife who is a cpa and she told me that I
could claim the daughter. I just want to verify the "rule" that
allows me to do this.
I appreciate all the help, and plan to read pub 501 today, and get
back here if I have any questions.

THANKS
- quote -

--
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"Arthur Kamlet" wrote:

- quote -

You never get to Step 4 if you have a qualifying child. See Step 3,
Question 2, which is the test (are you a qualifying child?) for people with
a qualifying child.

--
Phil Marti
Clarksburg, MD

--
<< ------------------------------------------------------- > << 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 (2007) - All rights reserved. > << ------------------------------------------------------- >

In article <4L0vj.11722$N95.10214[at]trnddc03> ,
Phil Marti <prm20871[at]verizon.net> wrote:
- quote -


Phil



See the 2007 1040 instructions page 45, step 4 question 3.

That prevents someone who can be claimed as a dependent
from claiming EIC.




--


ArtKamlet at a o l dot c o m Columbus OH K2PZH

--
<< ------------------------------------------------------- > << 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 (2007) - All rights reserved. > << ------------------------------------------------------- >

WD wrote:
- quote -

This information is important, for example in 2008 the daughter cannot
be anyone's qualifying child (for the Earned Income Credit, for example)
unless she is a full-time student, or permanently and totally disabled.

[...]
- quote -

Unfortunately neither of these two facts have any bearing on your tax
situation.

-Mark Bole

--
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"WD" wrote:

- quote -

Let's recap the facts. The household for 2007 consisted of you, your
girlfriend and your girlfriend's 18 year old daughter. (I assume from the
unquoted sad part of your story that GF's son did not live with you.) Aside
from approximately $2400 of income to your girlfried you were the sole
support of the household.

Verify this in IRS Publication 501, but it appears that both GF and her
daughter qualify as your dependents for 2007. That does not necessarily
mean that you should claim the daughter.

If GF's $2400 was from a job she qualifies for the Earned Income Credit. At
exactly $2400 the tax benefit of that credit would be $825. To get that tax
benefit from the daughter's exemption you would have to be in the 25%
bracket

So, figure returns for both you and GF under the following scenarios:

Scenario 1:

You file Single with both GF and daughter as dependents. If GF had tax
withheld, she files a Single return as a dependent to get a refund of the
tax withheld.

Scenario 2:

You file Single with only GF as a dependent. GF files as a Single dependent
with no dependents but one qualifying child for Earned Income Credit.
(Nobody claims the daughter's personal exemption in this scenario.)

Then you can pick which scenario is best for the household.

--
Phil Marti
Clarksburg, MD

--
<< ------------------------------------------------------- > << 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 (2007) - All rights reserved. > << ------------------------------------------------------- >

On Wed, 20 Feb 2008 13:42:48 EST, William Brenner
<wbrenner[at]nospamplease.net> wrote:

- quote -


Yes on December 3rd turned 18, so almost no birthday ha-ha


Ok I did forget to mention that the mother ( my girlfriend ) did
have an income of 2400.00 yes 24 hundred all year.

Just a little info on all this.
on September 26th her daughter (the child in question) went to take
her brother home , at the same time the police were persuing an
individual who was going the wrong way on the interstate, hence hit
her daughter and son head on ,
resulting in her son's death.


This has really been an emotional year and I am just trying to get all
I can for my providing for them.

I am a firefighter (31 years) and we do not make a whole lot of
money.


An extra couple grand in a refund sure would help.


Thanks to all who read and offer advice!!!!

--
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WD wrote:
- quote -


Hmm. Did she not have a birthday celebration during the entire year?
(Sorry, couldn't resist)

--
<< ------------------------------------------------------- > << 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 (2007) - All rights reserved. > << ------------------------------------------------------- >

"WD" wrote:

- quote -

Head of Household, definitely not. You don't have a "qualifying person,"
who must be related to you by blood, marriage or legal placement of a foster
child, in the home in question.

Dependent, maybe. If you can claim your girlfriend as a dependent you can
also claim her daughter. It's both or neither. See IRS Publication 501.

--
Phil Marti
Clarksburg, MD

--
<< ------------------------------------------------------- > << 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 (2007) - All rights reserved. > << ------------------------------------------------------- >