Goes back to school and wants to be a dependent again?

[TaxTime829]

I have a client who has a 21 year old daughter. She left home, got a job, got an apartment, etc. Recently she has decided to return to school and wants to be a veterinarian. Obviously this will require a PHD and many years of school. So Dad comes in my office and wants to make the daughter his dependent until she is 24 and deduct all her educational expenses on his return. He says he has agreed to buy her a car and pay 50% of her apartment rent... the rest of her expenses will be paid by student loans and a part time job earning $3000/Yr.
My question is... can she leave home and then come back as a dependent? I can't find any rule that says she can't... and she seems to fit all the rules for a dependent... It seems the biggest question is the "Temporary Absence" rule. She has lived away from home since she was 19 but will claim her Dads home as her home when returns to school.

[Gary2]

If her only income is $3000/year, then the residency might be a red herring, since she could still qualify under the QR rules (and since she's too old for the child tax credit, there's little difference between QC and QR).

The bigger issue is support. If she's taking out a student loan, that will generally count as support by her. It doesn't seem likely that the car and half the rent will be enough to outweigh her half the rent and the tuition. Thus, she's likely supporting herself and the parents won't qualify under either QR or QC rules.

Aside: I'd expect a Vet to get a D.V.M., not a Ph.D., though I imagine both are possible.

[appelman]

Gary is right.

Support is the big issue for either QC or QR. Who has actually taken out the loans?

[Kram BergGold]

Difference between QR and QC

To claim a QR you have to provide over 50% of support.
To claim a QC, the child can't provide more than 50% of support. Maybe there is a third party providing some support.
I think I could succesfully argue that in any year the child is a full time student, for more than 1/2 of the year, that the parents home could be claimed as a residence for claiming QC status.

[OtisMozzetti]

I have a client who has a 21 year old daughter. She left home, got a job, got an apartment, etc. Recently she has decided to return to school and wants to be a veterinarian.

...

My question is... can she leave home and then come back as a dependent? I can't find any rule that says she can't... and she seems to fit all the rules for a dependent... It seems the biggest question is the "Temporary Absence" rule. She has lived away from home since she was 19 but will claim her Dads home as her home when returns to school.

For the past several years, she has been absent but that hasn't been a "temporary absence" for one of the acceptable purposes such as schooling, medical care, military service, etc. In order to be a QC for 2012, she would need to use Dad's home as hers for more than 6 months out of the calendar year and it sounds as though that hasn't been so this year.

She might be a QR, which in some cases is a less desirable outcome, if all the conditions are satisfied.

[taxea]

"My question is... can she leave home and then come back as a dependent? I can't find any rule that says she can't... and she seems to fit all the rules for a dependent... It seems the biggest question is the "Temporary Absence" rule. She has lived away from home since she was 19 but will claim her Dads home as her home when returns to school."

Will she be moving back in with Dad? Will Dad be paying all of the expenses of her residence during the time she attends school?
Will she be staying at her present residence in order to be closer to the school? If she stays put and pays the residence expenses then she probably would not qualify as a dependent. If her residence expense is paid by Dad and is for the convenience of being close to the school then she MAY be able to have it considered a temporary residence and be Dad's dependent but this would include voter registration, car registration and all mail (etc) be to Dad's address. I am leary of the "will be using Dad's home as her home" statement.

A temporary residence while in school is usually for convenience of attending (out of state; school not within reasonable distance for daily travel purposes, etc). I don't think it will fly under the circumstances that were presented.