Arthur Kamlet wrote:

- quote -

At first I thought so, and yes the tie-breaker rules are optional if the
taxpayers mutually agree which will claim the dependency. This would
normally be the case for parent/grandparent deciding who will claim a
child living with both, as a common example.

But the "special rule for divorced/separated parents" requires that
exactly one parent must be the custodial parent. Per the recent posting
on "Final Regs Published Section 152(e)", it states that if the number
of days (nights) spent with each parent is equal, then the higher AGI
parent becomes by definition the custodial parent.

Effectively, the tie-breaker rule is mandatory, not optional in this
special case, and can only be overridden by use of Form 8332 (unless I'm
missing something, and I confess I haven't read every word).

- quote -

Thanx, that makes sense.

-Mark Bole

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

"Arthur Kamlet" <kamlet[at]panix.com> wrote in message
news:g4j9bq$kpo$1[at]reader1.panix.com...
- quote -

I agree. There's still the 365/366-day member of household dependent type.

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

"Bill Brown" <brownwp[at]longwood.edu> wrote in message
news:4d75e663-5041-4eff-ab3f-f009161a404b[at]d45g2000hsc.googlegroups.com...
- quote -

Since when does alimony HAVE to be a payment from one former spouse to
another? All that is required is that it be a payment of spousal support -
for which it could also be paid directly to third parties (e.g. utility
companies, etc.) on behalf of the otherwise receiving former spouse.

IRC 71(b)(1) "[S]uch payment is received by (OR ON BEHALF OF) a spouse under
a divorce or separation instrument," (capitalization added).

A direct payment to a third party for the former spouse's living expenses is
a payment "on behalf of" that former spouse.
(Just like "out of pocket" expenses for participating in charitable events
are deductible as contributions.)

I do agree that 71(b)(1)(C) does require that the former spouses may not be
members of the same household for the amount to be includible by the
recipient and deductible by the payor - but it's still alimony. However,
it's restricted to those legally separated or divorced (a COMPLETED action),
but may not apply to those where the action is merely PENDING with an
interim agreement in place. I think that's what publication 504 is getting
at.

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

"Stuart A. Bronstein" <spamtrap[at]lexregia.com> wrote in message
news:Xns9ACFC927DD39Dspamtraplexregiacom[at]130.133.1.4...
- quote -

Yes. However, there may be implicit alimony here too.

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

Mark Bole <makbo[at]pacbell.net> wrote:

- quote -

I haven't researched in with respect to this particular situation,
but in general they are treated the same. Legally separated means a
court decree of legal separation that is the functional equivalent of
divorce for people whose religion forbids them to get an actual
divorce. Except with respect to bigamy laws, they are treated as
divorced in just about every other way.

- quote -

Personally I think this comes down to same house vs. same household.
I've known divorced couples who remained roommates. I don't think
they could be said to have been in the same household.

Stu

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

Bill Brown <brownwp[at]longwood.edu> wrote:

- quote -

Assuming that's correct, just because two people live in the same house
doesn't mean they live in the same house. Remember the [unofficial but
often cited] bedroom rule?

Stu

--
<< ------------------------------------------------------- > << 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 <ED5bk.14022$mh5.6708[at]nlpi067.nbdc.sbc.com> ,
Mark Bole <makbo[at]pacbell.net> wrote:
- quote -

Is this a reference to the tie-breaker rules?

If so, the tie-breaker rules apply to qualifying children
of more than one taxpayer.

So, e.g., if the two parents, now divorced, lived together all
year, the tie-breaker rules then give the dependency exemption
to the higher AGI taxpayer.

Many years ago, just after the dinosaurs dissappeared, the tie-
breaker rules (somewhat different then) automatically gave the
EIC qualifying child to the higher AGI parent.


But since the invention of the greatly misnamed Uniform Definition
of Qualifying Child, the tie-breaker rules are optional, and are
brought into play only when the two or more parties do not agree
on who gets to claim the qualifying child.


- quote -


There are

i) personal exemptions, one per taxpayer listed on Form 1040 lines
8a and 6b

ii) dependency exemption for each dependent listed on line 6c.



I believe Pub 504 is referring to the personal exemption and not
the dependency exemption.
--


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. > << ------------------------------------------------------- >

Bill Brown wrote:
- quote -

No, it's not that simple. There's one clear exception, the
"one-month-before-leaving rule". Further, the "living in the same
household" rule *only* applies under a specific condition, that's what
I'm struggling with. I'm not a lawyer but have always understood that
"legally separated" and "divorced" are two distinct statuses, even
though in some areas of the tax code they are treated the same. My
question is, in this area (tax impact of alimony payments), is that also
true? It looks to me from Pub 504 that it is not.

Here is the full context of the "exception" quoted above:

---[quote]---
Spouses cannot be members of the same household.

Payments to your spouse while you are members of the same household are
not alimony if you are legally separated under a decree of divorce or
separate maintenance. A home you formerly shared is considered one
household, even if you physically separate yourselves in the home.

You are not treated as members of the same household if one of you is
preparing to leave the household and does leave no later than one month
after the date of the payment.

Exception: [...]
---[end quote]---

Elsewhere under "Alimony requirements", one of the conditions that must
be met:

"The spouses are not members of the same household at the time the
payments are made. This requirement applies only if the spouses are
legally separated under a decree of divorce or separate maintenance."

Remember that the term "spouse" usually includes "former spouse" under
the language of Pub 504.

To take Dick's original example further, suppose parents whose divorce
was finalized in some prior year, and who have been living apart, now
decide to live together again with their kids and do so for the entire
year. Seems to me the following statements are true in this case:

1) alimony paid is deductible for the payer, taxable income to the
recipient. (they are divorced, not just legally separated, so the
requirement about separate households does not apply).

2) If there is no alimony or it is below the exemption amount
(unlikely), and the support test is met, the ex-spouse with no other
income can be claimed as a dependent by the other parent.

3) The parent with the higher AGI is the custodial parent and can claim
the kids' dependency exemptions and HOH filing status (assuming all
other normal tests are met).

-Mark Bole

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

Bill Brown wrote:
- quote -


- quote -

This wouldn't be applicable in the case here as the OP stated the
individual is legally divorced so he wouldn't meet the "not" portion of
the initial qualifying phrase.

--

--
<< ------------------------------------------------------- > << 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 Jul 3, 10:06*am, Mark Bole <ma...[at]pacbell.net> wrote:

- quote -

No.

- quote -

I don't know what, if anything appears in Pub 504 before or after the
quoted passage but payments by one person to another are not alimony
if they are living in the same household.

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

Dick Adams wrote:
- quote -

If the children lived with each parent the same number of days during
the year, the custodial parent is the one with higher AGI. So, why does
he need a Form 8332? Aren't they already his qualifying children for
dependency purposes (and HOH, for that matter)?

Incidentally, back to the original topic: Pub 504 also contains this
statement:

"If you obtained a final decree of divorce or separate maintenance by
the end of the year, you cannot take your former spouse's exemption.
This rule applies even if you provided all of your former spouse's support."

-Mark Bole

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

Arthur Kamlet wrote:
- quote -

Pub 504 is clear as mud on this, especially since the term "spouse" is
also used to mean "former spouse" unless otherwise stated. If the
divorce is final, can't they still live in the same household and
claim/deduct alimony?

"Exception.
If you are not legally separated under a decree of divorce or separate
maintenance, a payment under a written separation agreement, support
decree, or other court order may qualify as alimony even if you are
members of the same household when the payment is made."


-Mark Bole

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

My mistake. I forgot to note there are two minor
children and they have joint custody and he has an
8333 for them.

Dick

--
<< ------------------------------------------------------- > << 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 <Xns9ACFC927DD39Dspamtraplexregiacom[at]130.133.1.4> ,
Stuart A. Bronstein <spamtrap[at]lexregia.com> wrote:
- quote -

Sure.

One of the underlying points of this new rule is state court orders
involving dependency exemptions and, presumably, HoH qualifying
persons, are moot for federal tax purposes. Oh, a divorce is
a divorce and I suppose an annulment is an annulment. But an
order assigning the dependency exemption issued from now on
will be ignored for federal tax purposes.


Besides, HoH does not demand that he merely support an HoH
qualifying person, it demands that he provide most of the
Household costs for her.

One other item is that if he is required to pay her alimony,
sometimes called spousal support, and they are now living
together, whether or not for fun and profit, the alimony is
neither deductible by him nor taxable to her.

I would think that divorce attorney CPEs would include a lesson
on adding "Jane Doe will be requird to complete IRS Form 8332 or
its successor forms assigning the dependency exemption to John Doe
every year until the minor child Junior Doe is age 21" and then
the only relief Jane would have if John refuses to sign an 8332
is to go back to the state court to compel John to comply.


And now getting a multiyear 8332 is fraught with a great deal of
danger should the custodial parent wish to revoke it.

And if the order was conditional, as just about all orders
written in Franklin County Ohio are when child support is
involved, the state court is the only one to determine if
the condition has been met.
--


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. > << ------------------------------------------------------- >

kamlet[at]panix.com (Arthur Kamlet) wrote:
- quote -

I haven't gone to look at the statute, but is that the case even if
there's a court order from the divorce requiring that he support her?

Stu

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

Dick Adams wrote:

- quote -

Unfortunately, except in the cases of qualifying-child tie-breaker rules
and signing a joint return (neither of which apply here), her
"agreement" or lack thereof has no bearing on the tax matter. I wonder
if she also agreed to no alimony? The benefit of that to him will
probably dwarf any tax benefit from claiming her as a dependent.


Harlan Lunsford wrote:
- quote -

Right -- just signing it as a paid preparer puts you at risk, whether
you are willing to represent down the road or not.


Arthur Kamlet wrote:
- quote -

That's the messy part -- just because she had no income doesn't mean she
didn't provide a significant portion of her own support, especially if
she owns (or owned) half of a house they live in. She might also have
spent money from gifts, loans, or savings to support herself. As
mentioned, Pub 501 has help for this, including a support worksheet.

-Mark Bole

--
<< ------------------------------------------------------- > << 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 <g4gfp6$o5d$1[at]reader1.panix.com> ,
Dick Adams <rdadams[at]panix.com> wrote:
- quote -


In order to claim her as his dependent, she must pass the
Qualifying Relative tests, including the support test (he
provided more than half her support.)


And in order to claim HoH he must have a HoH qualifying
person. One requirment to be an HoH Qualifying Person
is a close blood relationship. Ex-spouse fails this test.


Pub 501 has good decriptions on both these issues.
--


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. > << ------------------------------------------------------- >

Dick Adams wrote:

(snipped.....
- quote -

And my take on this is that if you aren't sure about the law, do not
preparer the return.
IOW, never prepare a return unless you are willing to represent the
client.

ChEAr$,
Harlan

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

A friend call me this morning. He wanted me to
look into something a client wants to do. The
background is the client is in Illinois where
there is no separate and apart requirement and
an amicable divorce takes 2-3 days to process.

Client got divorced in December, but remained
in the house. Client's ex-spouse had no income
for 2007 and apparently will agree to anything.
(How come I never find these women?) Client
wants to file HoH and claim is ex-spouse as a
dependent.

I recall an Indiana Tax Court case in the '80's
where something similar occured. In that case,
the husband had custody of six children, wife
returned a year or so later, lived with him,
and had another child. IRS classified her as a
unpaid domestic worker. Tax Court reject the
IRS' position. I recall it because it made the
then Wednesday Tax Column on the front page of
the Wall Street Journal.

My take on the Illinois client is "get a large
fee upfront and do not plan on representing him
when he gets audited."

Dick

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >