24 yr old grad student w/income of $3400 still a dependent for parents?

[nwtaxlady]

My clients have a 24 yr old who is continuing her education getting her masters. She goes to a relatively expensive college and has student loans. She only made $3400 so would she still qualify as a dependent on her parents return?

I know she would not qualify as a "qualifying child" because she is 24. So how about under "qualifying relative" because she made less than the $3700. She did live at home during summer break etc, and gone temporary absence to school. Parents still have her on their medical insurance and car insurance etc. Parents have substantial income! She drives a very nice car that her parents have provided for her. They give her $300-$400 cash every month on top of that for gas and whatever.

So could the parents still claim her as a dependent, she is 24 and income of $3400 and a fulltime grad student.

Then can parents also claim the LTLC education credit? No AOC because she is in grad school.

[dtlee]

My clients have a 24 yr old who is continuing her education getting her masters. She goes to a relatively expensive college and has student loans. She only made $3400 so would she still qualify as a dependent on her parents return?

I know she would not qualify as a "qualifying child" because she is 24. So how about under "qualifying relative" because she made less than the $3700. She did live at home during summer break etc, and gone temporary absence to school. Parents still have her on their medical insurance and car insurance etc. Parents have substantial income! She drives a very nice car that her parents have provided for her. They give her $300-$400 cash every month on top of that for gas and whatever.

So could the parents still claim her as a dependent, she is 24 and income of $3400 and a fulltime grad student.

Then can parents also claim the LTLC education credit? No AOC because she is in grad school.

This sounds like a dependent with one question about how much the student is borrowing. Funds borrowed by the student are considered support provided by the student on their own behalf.

In addition to the gross income test and the member of household/relationship test that you covered, I am assuming that this student passes the citizenship/residence test and the joint return test.

Thus the only question I have is the support test. If the parents provided more than half the total support then I believe you have a Qualifying Relative dependent.

[FEDUKE404]

Too much income

Regardless of the dependency issue qualifications (more work needed!) isn't any consideration of LTC virtually a moot point because of parents' MAGI ?

(You did state "Parents have substantial income.")

FE

[BHoffman]

How much did the student have to pay for contraception? That would definitely be a huge factor.

[David1980]

This sounds like a dependent with one question about how much the student is borrowing. Funds borrowed by the student are considered support provided by the student on their own behalf.

+1

Often missed, it's not income that matters. It's support. If that's from a savings account, from loans, etc... Support provided by the dependent can come from any number of places other than income. You said the school is relatively expensive. So if the bulk of the tuition is being covered by student loans it can very well be the case the student provided over half their own support.

[nwtaxlady]

for real?

How much did the student have to pay for contraception? That would definitely be a huge factor.

probably $10 a month.

[nwtaxlady]

not over the limit.

Regardless of the dependency issue qualifications (more work needed!) isn't any consideration of LTC virtually a moot point because of parents' MAGI ?

(You did state "Parents have substantial income.")

FE

Not that much, they would still benefit from the LTLC. I just wanted to make the point that they have plenty of income....not like ones with only $20K trying to support everyone.

So yes, they do have TAXABLE income of $110,000 plus other Nontaxable income.

[nwtaxlady]

I agree with your point.

+1

Often missed, it's not income that matters. It's support. If that's from a savings account, from loans, etc... Support provided by the dependent can come from any number of places other than income. You said the school is relatively expensive. So if the bulk of the tuition is being covered by student loans it can very well be the case the student provided over half their own support.

Thanks for pointing that out.

[RitaB]

Good one

How much did the student have to pay for contraception? That would definitely be a huge factor.

Wiping tea off the ole keyboard, but that was worth it. LOL.