Separated Parents .. Custodial parent?

[ddoshan]

What happens when and if you have 2 parents each of whom agree that the child spent an equal number of nites with each parent. Leap year 366 days so 183 nites each. I see where the parent with the higher AGI is considered the custodial parent. However, what happens to the EIC, HH filing status, and the child tax credit all of which seem to indicate that the child must have lived with you for more than half of the year.

Is 183 days considered more than half of the year, in a year with 366 days?

[appelman]

Interesting question

I believe the custodial parent claims exemption and child tax credit, unless these have been waived to the non-custodial parent. I'm not sure that ANYONE can claim HofH, EIC, or dependent care. Anyone else have a take on this?

[veritas]

So the question is

what is the definition of a year?

[Nashville]

Neither is Custodial

Neither parent can be custodial. Custody goes to the parent to whom the child spends most nights with. If neither parent can claim this is the case, then neither parent can be custodial.

Doshan, what is probably happening is this: someone is trying to get you to claim the child while not depriving the other parent, and they are contriving this 50-50 scenario in order to box you into a fact-finding position that you don't need to be in.

Do this:
1) Tell them you are "so sorry" but since this is an absolute 183-183 tie, then neither parent is considered custodial by the IRS.
2) They will "check their records" and discover than in fact one of the parents kept the child longer than the other, and there is no 183-183 tie after all.
3) Document the conversation and proceed accordingly based on the new information.

[appelman]

Not quite!

From the 1040 instructions:

Custodial and noncustodial parents. The custodial parent is the parent with whom the child lived for the greater number of nights in 2009. The noncustodial parent is the other parent. If the child was with each parent for an equal number of nights, the custodial parent is the parent with the higher adjusted gross income. For details and an exception for a parent who works at night, see Pub. 501.

[BP.]

IRS Example:

"Example 3—child lived same number of
nights with each parent. Your son lived with
you 180 nights during the year and lived the
same number of nights with his other parent,
your ex-spouse. Your AGI is $40,000. Your
ex-spouse's AGI is $25,000. You are treated as
your son's custodial parent because you have
the higher AGI."

Once the parent is treated as custodial, then why wouldn't the benefits relevant to a custodial parent apply?

[ddoshan]

BP I like your example rather than dealing with the leap year situation. But indeed how would either parent meet the over one half of the year rule for HH, EIC, etc. Unless they somehow would automatically follow to the custodial parent, which I am not sure it would.

[veritas]

The answer I believe is

"taxable year" which could be 365 or 366 days.

[Nashville]

Things stay the same

IRS Example:

"Example 3—child lived same number of
nights with each parent. Your son lived with
you 180 nights during the year and lived the
same number of nights with his other parent,
your ex-spouse. Your AGI is $40,000. Your
ex-spouse's AGI is $25,000. You are treated as
your son's custodial parent because you have
the higher AGI."

I may stand corrected, but I still say there is a 99.99% this story is contrived, and my advice is
to do this:

1) Tell them you are "so sorry" but since this is an absolute 183-183 tie, then neither parent is considered custodial by the IRS.
2) They will "check their records" and discover that in fact one of the parents kept the child longer than the other, and there is no 183-183 tie after all.
3) Document the conversation and proceed accordingly based on the new information.

[No need to look folks, this is verbatim]

The more things change, the more things stay the same.

I give proper credence to those who have posted the "higher AGI" solution, but I can guarantee the aforementioned is more effective and 99.99% accurate. Even if not, try asking a client whether (s)he or the ex-spouse has a higher AGI and see what a snakepit you get into.

[smithtax]

Special Rules for a Child of Divorced or Separated Parents

Reg Sec 1.152-4

The entire regulation was too large to post in this forum, but is a link:

http://www.law.cornell.edu/cfr/text/26/1.152-4

[ddoshan]

http://www.law.cornell.edu/cfr/text/26/1.152-4

I always thought I had a pretty good handle on the various situations but it sure can get confusing.

[smithtax]

Great minds think alike ddoshan.

[New York Enrolled Agent]

1) Tell them you are "so sorry" but since this is an absolute 183-183 tie, then neither parent is considered custodial by the IRS.

I give proper credence to those who have posted the "higher AGI" solution, but ....

Sorry but there is no "but'.

You need to read the regulation that the EAnOK referred to. It is pretty clear.

(4) Special rule for equal number of nights.
If a child is in the custody of one or both parents for more than one-half of the calendar year and the child resides with each parent for an equal number of nights during the calendar year, the parent with the higher adjusted gross income for the calendar year is treated as the custodial parent.

[veritas]

I know I'm asking for it but

What if the aforementioned taxpayers were on a fiscal year?

I refer back to my earlier post, "taxable year".

[Gary2]

What if the aforementioned taxpayers were on a fiscal year?

I refer back to my earlier post, "taxable year".

That's the wrong question, since the answer is the same, only the numbers change.

The right question is "What if they are on different fiscal years?"