Does the dad meet the Dependency Test?

[Sherill]

I have a 67 yr old client who has her 97 yr old incapacitated father living with her (lived w/her for the last 3 yrs).
Father receives $900/mo SS and - Gross Income of $1922 from Bonds in the Stock Market worth 51K.
Does the dad meet the dependency test, yes or no? Why?
Thank you and I continue to enjoy your professionalism on this web site! Keep up the good work.

[JoshinNC]

Depends

Does he spend the SS income or save it? What is the fair rental value of the home? Is dad on Medicare? How much did Medicare spend on dad's care last year?

This is a case by case question that needs to be analyzed.

[Burke]

On the face of what you say, probably yes. The support question is the issue. Run the numbers to see if TP qualifies.

[Gary2]

Does he spend the SS income or save it? What is the fair rental value of the home? Is dad on Medicare? How much did Medicare spend on dad's care last year?

The amount that Medicare spent on the father is irrelevant, but the amount the father had withheld from Social Security to pay Medicare premiums (or that he otherwise paid for Medicare or other insurance) counts. See Medical Insurance Premiums and Medical Insurance Benefits on page 18 of Pub. 501.

[JoshinNC]

See Pub 17, page 32

regarding Support provided by the State. Medicare would satisfy support provided by the State, so it would need to be included, I believe.

[taxea]

is this a trick question? because it is way to simple for a pro

[Gary2]

regarding Support provided by the State. Medicare would satisfy support provided by the State, so it would need to be included, I believe.

Medicare is not support provided by the state. It's an insurance benefit received as a result of having paid for Medicare insurance, same as any other insurance benefit. Any Medicare premiums withheld from Social Security benefits count as support provided by the recipient, in this case, the father. The benefits are ignored.

The citation in Pub. 501 that I gave is explicit on this.

Medicaid, on the other hand, is a different story.