Dependents vs Exemptions

[factfinder]

Have a situation where boyfriend and girlfriend live together. Girlfriend does not work and has two adopted children (her niece and nephew). All have lived together for 12 months. Can boyfriend claim all three, just the children, or none. He has been the sole supporter. Girlfriend will not be filing a tax return for any reason.

Thanks for some guidance.

[mastertaxguy]

Dependent exemptions.

1. Why not?
2. Filing status is single, not HOH as there is no "family" relationship with the girlfriend and her two "children."
3. All three are qualifying relatives. SEE TheTaxBook(r) pp. 3-17, example at the top of the page.
4. Note: no child tax credit, no EITC.
5. Facts state the 'children' are niece/nephew of girlfriend. Don't be surprised if someone else has already claimed the children.

[taxea]

Relationship of the adults is an unmarried couple with the female having two adopted children which means they are her legal children. They live as a family and the female does not work. Why would he not qualify for three dependents? Does he treat the kids as his own children? Or HOH with the two children as dependents? Has he taken a role as their father? The mother has full custody via adoption she can sign the form giving him the authority to take the kids since he is their full support.

[WhiteOleander]

Relationship of the adults is an unmarried couple with the female having two adopted children which means they are her legal children. They live as a family and the female does not work. Why would he not qualify for three dependents? Does he treat the kids as his own children? Or HOH with the two children as dependents? Has he taken a role as their father? The mother has full custody via adoption she can sign the form giving him the authority to take the kids since he is their full support.

You could not be more incorrect.

[Gary]

Twelve Months

You said they lived together twelve months, but was it twelve months in 2012?

[taxea]

You could not be more incorrect.

All of my comments were posted as questions meaning more research to verify whether each would pass "muster" was needed. If you are going to make such a bold statment you could at least qualify it.

[Bees Knees]

Or HOH with the two children as dependents?

He can't take HOH. See TTB, page 3-17, example at the top of the page.

[WhiteOleander]

All of my comments were posted as questions meaning more research to verify whether each would pass "muster" was needed. If you are going to make such a bold statment you could at least qualify it.

Why, you never qualify your statements. I'm still waiting for you to provide a cite that an installment note receives a stepped-up basis at the death of the owner.

Read pages 3-15 thru 3-18 un TTB and educate yourself.

[Koss]

Dependents

I agree with the previous comments that the taxpayer may claim all three as dependents under the rules for qualifying relative. The relationship for all three is OTHER or NONE.

taxea wrote:

Does he treat the kids as his own children? Or HOH with the two children as dependents? Has he taken a role as their father?

HOH is not an option. Prior to 2005, the definition of "foster child," for purposes of HOH, included a child that the taxpayer "treated as their own child." That definition is no longer applicable.

taxea wrote:

The mother has full custody via adoption she can sign the form giving him the authority to take the kids since he is their full support.

What form are you referring to? Form 8332?

The instructions for Form 8332 say:

- - -
Purpose of Form

If you are the custodial parent, you can use this form to do the following:

- Release a claim to exemption for your child so that the noncustodial parent can claim an exemption for the child.
- Revoke a previous release of claim to exemption for your child.
- - -

So you think the taxpayer in this case is the noncustodial parent?

He is neither the custodial parent nor the noncustodial parent. He is not a parent of the children.

Form 8332 is not applicable to this fact pattern. Using it serves no purpose, and may only cause confusion and problems.

BMK

[DexEA]

Relationship of the adults is an unmarried couple with the female having two adopted children which means they are her legal children. They live as a family and the female does not work. Why would he not qualify for three dependents? Does he treat the kids as his own children? Or HOH with the two children as dependents? Has he taken a role as their father? The mother has full custody via adoption she can sign the form giving him the authority to take the kids since he is their full support.

Original post states boyfriend and girlfriend live together, so under what circumstances could he qualify for HOH? Because they "live as a family" and he treats the kids as his own children will not/cannot qualify someone for HOH. Because the mother has full custody via adoption she can't just give anyone authority to take the kids even it he does provide full support. More than once you have suggested the 8332 be used to allow someone other than the noncustodial parent claim the kids. Other then signing the form to allow the noncustodial parent claim the kids, under what exception could the form ever be used to give anyone else authority to "take the kids"?

[TAX4US]

Does state law play a role here. It is said that VA does not allow boyfried to claim girlfriend if they cohabitate. Antique law but may still be on books. what say others?

[Koss]

Cohabitation

It sounds like you are referring to the section of the rules for a qualifying relative, where it says that "the relationship may not violate local law."

This has been debated for many years. My view, which is shared by many others, but not certainly not everyone, is that these laws are unconstitutional, and that it is extremely unlikely that an IRS auditor would disallow a dependency exemption solely on the basis of such a law.

This position is particularly strong since the US Supreme Court ruling in Lawrence v. Texas. That case involved a sodomy law. But the legal principle is applicable to any law that makes cohabitation illegal. In Lawrence v. Texas, the Supreme Court ruled that consenting adults have the right to have sex, even if they are not married, and any law that makes such conduct illegal is an unconstitutional law. This applies to all unmarried couples, whether same-sex or heterosexual. I believe the ruling was based on the constitutional right to freedom of association.

Put another way: You have the right to choose who you live with, and you also have the right to choose who you have sex with. And the state cannot make it illegal for you to have sex with a person you are living with just because you are not married.

With respect to the law in Virginia--

In 2005, the Virginia Supreme Court ruled that the state law prohibiting cohabitation by unmarried adults is unconstitutional. The ruling specifically referenced Lawrence v. Texas. The case is Martin v. Ziherl.

There is a bill pending in the Virginia state legislature to repeal the law. But even though it was still technically in effect during 2012, the law was unenforceable, based on Martin v. Ziherl.

Even in the other states that still have these laws on the books, the US Supreme Court decision in Lawrence v. Texas is sufficient to make it reasonable to take the position that these laws are unconstitutional and unenforceable. As I said earlier, I don't think an IRS auditor would raise the issue. But if they did, taking the dependent exemption is not a frivolous position, and I don't think there would be any penalties involved.

BMK

[taxea]

My post was to get the original PO to think and research whether any of my questions could be used as justification to take any of the 3 in any capacity. Thank you for providing the answers ....the intention was for the ori PO to figure them out.

[taxea]

Why, you never qualify your statements. I'm still waiting for you to provide a cite that an installment note receives a stepped-up basis at the death of the owner.

Read pages 3-15 thru 3-18 un TTB and educate yourself.

What I said was it was my belief that the PR or trustee could call in the note on an installment agreement of sale on the demise of the seller of the property.

[DexEA]

................ The mother has full custody via adoption she can sign the form giving him the authority to take the kids since he is their full support.

My post was to get the original PO to think and research whether any of my questions could be used as justification to take any of the 3 in any capacity. Thank you for providing the answers ....the intention was for the ori PO to figure them out.

Oh, I see, I just thought that sounded to me more like a statement than a question.