Daughter age 24 full time student

[photoman]

Would this be correct. Client has daughter that turned 24 in oct 10. She is a full time student in college and does not work or have any income except from parents and they also provide her a car. She lives on campus. She does have student loans that are helping aid her. Parents are wanting to get one more year of claiming her. Any thoughts would she be a qualifying relative or would student loan money count. Any comments.

[Uncle Sam]

Full Time Student

Look at TTB P.3-15 - for dependency tests.

The way I see it - so long as the child does not have taxable income of $ 3,650 she can be claimed as a dependent if she's a full time student.

[Koss]

Disagree...

Status as a full-time student is irrelevant because the child was not under 24 at the end of the year.

She can't be a qualifying child. Period. End. Unless she were disabled, which is not the case. She may be a qualifying relative.

This one gets very gray and very subtle. The post says she "lives on campus," which may or may not mean in a dormitory, but that's not a determining factor, either. Whether she lives in a dorm or in an apartment that is "on campus" as in "right near the college," the question is whether she lived with her parents for more than half the year. If she is "away at school," then it may well be a temporary absence, so she would meet the criterion of living with the taxpayer for the entire year, for purposes of a qualifying relative.

But then you have to determine whether her parents provided more than half of her support. The loan money will be considered money that she borrowed to support herself. Unless... well, the parents might have co-signed the loan...

Scholarships and grants are not considered support for the child. They are not considered support provided by the child, and they are not considered support provided by the parents.

The post says the child has no income.

So it all hinges on what her total living expenses were, and how you treat the loans.

Even if the parents co-signed for the loans, I think the loan money is money that the student borrowed, to support herself, because she is the primary borrower. She would have to default before the lender would look to the parents for repayment.

So in order to claim her as a dependent, the support provided by the parents, including the fair market value of the car, or whatever else there may be, would have to exceed the amount borrowed.

BMK

[photoman]

I am going to ask more questions and after the responses it may prove difficult to cliam her. I will dig for more answers but looking slim.

Thanks

[Gary2]

This one gets very gray and very subtle. The post says she "lives on campus," which may or may not mean in a dormitory, but that's not a determining factor, either. Whether she lives in a dorm or in an apartment that is "on campus" as in "right near the college," the question is whether she lived with her parents for more than half the year. If she is "away at school," then it may well be a temporary absence, so she would meet the criterion of living with the taxpayer for the entire year, for purposes of a qualifying relative.

It's neither gray nor subtle at all. There's no requirement that a daughter live with parents at all for her to be a qualifying relative.

[Koss]

Qualifying Relative

Gary2 is correct, of course. I got confused about the requirements. A daughter is one of those "relatives who do not have to live with you."

It all boils down to the support question. It is clear that in this case she has no gross income.

BMK