Adopted Grandchild

[Bird Legs]

Client has been raising, and claiming dependency, on a granddaughter. At the end of
2005 she was 9 yrs. old.
Have been reporting her has granddaughter on the tax return in the past.
Now, adoption is finalized in December, 2005. Would the child be listed as
daughter or granddaughter on the return?
Thanks for any info on this.

[Bill Tubbs]

daughter

I would say first, that it doesn't really matter from a numbers perspective, and then secondly, go with daughter.

Reasoning:
1) if a couple is married on 12/31/05, they are married for filing the return
2) if you adopt a non-relative child anytime during the year, would you put "other" or "child"?

Bill

[Koss]

Doesn't matter

Both relationships meet all criteria for qualifying child.

Granddaughter more accurately describes the true relationship, and that's what I would use.

The only reason the distinction could possibly become relevant is if the child's parent also tried to claim the child as a qualifying child. The adoption gives your client the same rights as a parent when it comes to the tiebreaker rules, so instead of the parent prevailing over the grandparent, the one with the higher income would prevail.

Burton

[Bill Tubbs]

Daughter

The only reason the distinction could possibly become relevant is if the child's parent also tried to claim the child as a qualifying child. The adoption gives your client the same rights as a parent when it comes to the tiebreaker rules, so instead of the parent prevailing over the grandparent, the one with the higher income would prevail.

But, if the original parents try to claim the kid and this taxpayer lists the relationship as granddaughter, this taxpayer would lose the tiebreaker. Until they show the IRS that they are actually now the legal parents. Which then, why not just start out listing the child as "daughter"?

BTW, if grandparents adopted the child, wouldn't the parental rights of the original parents now be terminated? That in itself though may not keep original parents from trying to claim child.

Bill