Gramma's dilemma

[Taxadvisor VA]

Gramma's daughter lived with her for all of 2011. Daughter has 3 children under the age of 15. Daughter did not work at all in 2011. Gramma filed HOH, claimed her daughter and 3 grandkids. No problem here.

In 2012, Gramma decided to rent her home. She, daughter and 3 children moved out on 4.30.12. The daughter moved into an apartment, while Gramma moved into a separate residence.

For 2012, she has to file single and not HOH. I get that.

Now, gramma continues to provide support for her daughter, pays all her bills, and provides for her 3 grandkids as well.

Can gramma claim anybody in 2012?

The 4 dependents in ? do not meet the member of household test, which falls under the qualifying child rules.

Now under the qualifying relative rules, it would seem all are met.
1) None can be claimed on another's return.
2) MFJ test is n/a/
3) All US citizens.
4) Realtionship tests are met.
5) Not a qualifying child test does not apply.
6) Gross income test. Daughter does not work and had no income. She is older than 23.
7) Support test- Gramma clearly pays all the bills and provides > 50% of their support.

Can she claim all 4 filing single? ________________

Thanks,

Taxadvisor VA

[dkss]

I would take them as qualifying relatives, dependency only - therefore, no eic or child tax credits. I would also want to see some checks (not all) to prove that she paid for rent, utilities, and other expenses for the daughter and grandkids. Filling out a support worksheet would be beneficial also.

[BP.]

daughter moved into an apartment, while Gramma moved into a separate residence

One thing I would confirm is that the daughter and three kids, when they lived separately from Gramma, did not then live with the income-earning father of any of the kids.

Though you do mention this QR test is met:

1) None can be claimed on another's return.

That test relates to the taxpayer, not their potential dependents.

[ddoshan]

You probably need to run thru the support worksheets to get a better idea as to total support for the year and how much grandma provided. It seems reasonable that the daughter and kids got help from some other sources such as child support, government assistance, roomates, SSI, etc.

[taxea]

and make sure gramma is making the payments directly to the company she is paying the bills for. How does she pay for the groceries, clothing, etc?

[oceanlovin'ea]

sad state of affairs

This world has come to a sad state of affairs when a mother has to support her grown daughter and 3 grandchildren. She probably got them a separate place to live so she could have a little peace. But now she will be grilled and grilled as to how she paid the bills and to whom and all the other questions you have suggested that we ask.
Now I know this is all important and that we have to ask the questions and check everything out. That is because so many will take advantage of the system and lie or not tell the whole truth.
To me it is just sad that we can't take someone's word for something they tell us and we have to investigate for the IRS.

Linda, EA

[taxea]

This world has come to a sad state of affairs when a mother has to support her grown daughter and 3 grandchildren. She probably got them a separate place to live so she could have a little peace. But now she will be grilled and grilled as to how she paid the bills and to whom and all the other questions you have suggested that we ask.
Now I know this is all important and that we have to ask the questions and check everything out. That is because so many will take advantage of the system and lie or not tell the whole truth.
To me it is just sad that we can't take someone's word for something they tell us and we have to investigate for the IRS.

Linda, EA

I wasn't looking at "who exactly gets the money to pay the bills" as Gramma not being honest but, more as easier to prove to IRS that the money is going to what it was supposed to go to. IRS may question that if the daughter is being given the money to pay the bills, where is the proof that the money is going for support. And what happens to poor Gramma when the utilities get turned off and daughter gets an eviction notice for not paying the rent?

My comments are meant to CYA for Gramma when things blow up. When helping family one should go about it the smart way. It is to protect her that I suggested the payments go directly to the provider of the services.