I have taxpayer A, with biological child, earning all income while Taxpayer B stays home with child, earning no income except dividends and capital gains less than $2k. They live in same household in NH. Can taxpayer B be claimed as a dependent? Which "local law" do I have to worry about?
-
-
NH local lawOriginally posted by KarenMMEverybody should pay his income tax with a smile. I tried it, but they wanted cash -
If same sex domestic partners are legal in NH, then the nonworking partner can be claimed as a dependent of the other, provided the qualifying relative dependency tests are all met.Comment
-
Enforcement
It has alwys been my understanding that to be in violation of a local law the law has to be enforced. My guess is that no homosexuals have been prosecuted in NH for living together in recent history so I would claim the exemption if I believed local law if in existance was not enforced.Comment
-
it's nonsense
Personally, I think it's nonsense to be bedroom cops. I have no more reason to think two guys or two women are sexual criminals than I do to think a brother and sister are committing incest.Comment
-
Partners
Bees, I have to disagree with you, or clarify one point.Originally posted by Bees Knees
The federal tax law does not require that local law recognize same-sex domestic partners as some sort of formal relationship in order for one partner to claim the other as a dependent. The requirement is that the relationship cannot violate local law. A careful review of the facts, in most cases, will lead to the conclusion that there is no relevant local law.
It doesn't matter whether NH local laws actually recognize some sort of status for domestic partnerships. The only bone of contention is that if you read the federal tax law literally, the dependent exemption could be denied if local laws actually prohibit some aspect of the relationship.
The local laws in question, of course, are laws that purport to prohibit sodomy or certain other sexual behavior. These laws, to the extent that they still exist, are unconstitutional and unenforceable. The US Supreme Court struck down the Texas sodomy law.
Gay relationships, in general, do not violate local laws.
BurtonBurton M. Koss
koss@usakoss.net
____________________________________
The map is not the territory...
and the instruction book is not the process.Comment
-
DOES violate local laws
An example of a relationship which DOES violate local laws is harboring a fugitive. Also, I believe slavery does not qualify for the exemption.Comment
-
I believe I said "If same sex domestic partners are legal in NH..." I did not use the word recognize.Originally posted by Koss
It is legal in Minnesota to own a copy machine. However, there is no law on the books that recognizes copy machine ownership as legal in Minnesota. Copy machine ownership is legal simply because no law prohibits the ownership of copy machines.
Therefore, I am justified in saying that since copy machine ownership is legal in Minnesota, I can deduct the cost of one if I buy it for business purposes. That is not the same as saying Minnesota recognizes copy machine ownership as some sort of formal relationship.Last edited by Bees Knees; 03-22-2006, 05:52 PM.Comment
-
What about fax machines?Comment
-
Unmarried couples, gay and straight
* * * * *Originally posted by Bees Knees
Okay, Bees, maybe I misconstrued your post. You are actually supporting my position on heterosexual unmarried couples in states such as Florida, where some tax pros on this board and others have argued that one partner cannot claim the other as a qualifying relative because "Florida does not recognize common law marriage," or because Florida somehow outlaws cohabitation.
Recognizing common law marriage is totally irrelevant, and this argument merely demonstrates that the person doesn't understand the question. If a state really recognized the couple as a "common law marriage," then it would be a joint return. As Bees is saying, a state doesn't have to recognize anything.
The claim that Florida "local law" somehow prohibits an unmarried couple from living together is not entirely irrational. I just don't buy it. The Florida statute that is the basis of this claim is overly broad and unduly vague. It doesn't prohibit an unmarried couple from living in the same household, and it doesn't explicity prohibit specific sexual behavior. It prohibits "lewd and lascivious" relationships or conduct, or something like that. The law is rubbish. It has not been used to prosecute anyone in over 40 years, and it would never survive a constitutional attack. Enforcement of the law would violate the consitutional right to privacy and freedom of association.
Burton, practicing law without a licenseLast edited by Koss; 03-24-2006, 02:54 AM.Burton M. Koss
koss@usakoss.net
____________________________________
The map is not the territory...
and the instruction book is not the process.Comment
-
Here's a wrench
Your best friend is a heterosexual male. You are a heterosexual male. Your best friend is out of work and down on his luck. Has no family around. You take him in and he lives with you for the entire year. Earnings are 0. You provide all of his support. Now, you can claim him as a dependent because you are both heterosexual, but if you were a homosexual couple it would be disallowed because an archaic law is still on the books that states that homosexuality is illegal? Bull.
You are not trying to claim the person as your spouse and MFJ. You are claiming the dependency exemption. If the IRS tries to disallow the exemption due to "local law" just tell them they are room mates.
Matt, also practicing law without a license.I would put a favorite quote in here, but it would get me banned from the board.Comment
-
Bees. Burton,Matt
I am in total agreement with you on this, however in my 20 years of doing taxes in Florida this is how it has been.I have never argued about it; I just accepted it. All or most Tax pros that I know are doing the same thing.
A few years ago I took a refresher course at H & R Block and they preached the same thing. Should I just go ahead and make the change?
Not trying to practice law in Fl.
Burton you should try to get some sleep at 2.54 am
Thanks guysEverybody should pay his income tax with a smile. I tried it, but they wanted cashComment
-
I did extensive research on this for a newsletter that I used to write for. IRS Letter Ruling 200339001 dealt with the issue of the tax treatment of medical and dental benefits provided by an employer to the domestic partners of employees. Under the plan, an eligible dependent included an employee’s same-gender domestic partner.
The taxpayer requesting the ruling represented that there was a domestic partner certification to the effect that the relationship between the employee and domestic partner does not violate local law. The IRS stated that domestic partner certification can be used to establish that the domestic partner is a dependent of the employee. The employees were allowed to exclude the medical and dental benefits provided for the benefit of the same-gender domestic partner because of this certification that indicated local law was not being violated.
The letter ruling did not address the issue of what would have been the outcome had there been no certification.
Interesting conclusions:
1) If there were no local laws in existence in the United States to violate in regards to same-sex domestic partner relationships, then this 2003 IRS Letter Ruling would be making a moot point.
2) The last Tax Court case out there dealing with this local law issue dates back to 1962. The IRS no longer appears to be taking the issue to court.
These two facts appear to contradict each other. Why did IRS mention old rules it appears to no longer enforce?
This is an issue that divides. There is a segment of the population that wishes to hold on to the old moral law codes, as represented in the 1996 Defense of Marriage Act (Public Law 104-199). There is another segment of the population moving to abolish all of these old laws, as represented in a number of states such as Massachusetts that allow same-sex domestic partners to file the state return as Married Filing Joint.
It would be prudent on our part as tax professionals to stick to the facts and leave our own personal feelings out when advising our clients on what is and what is not acceptable for tax law purposes.Last edited by Bees Knees; 03-24-2006, 09:52 AM.Comment
Comment