Mandatory Tie Breaker?

[Gretel]

appelman
Default When are tiebreaker rules mandatory?
One source of confusion is which of the tiebreaker rules are mandatory and which only go into effect when two persons actually claim a child. For example, as I understand it, a parent can never forgo the dependency deduction in favor of an otherwise qualified non-parent with lower AGI. In that case, NOBODY gets the deduction. On the other hand, qualified parents can agree between themselves who takes the deduction, without regard to the tiebreaker rules. Would the rest of you agree?

Appelman, I decided to start a new thread with this since the original post had been burdened enough.

Here is what I believe: The tie breaker rules by themselves are never mandatory and apply only if two qualified persons claim the same child. However, since a child can be claimed as "qualifying relative" only if this child is not a qualifying child for any other person, your assumption comes into play and is correct in that sense.

[ddoshan]

Here is what I believe: The tie breaker rules by themselves are never mandatory and apply only if two qualified persons claim the same child. However, since a child can be claimed as "qualifying relative" only if this child is not a qualifying child for any other person, your assumption comes into play and is correct in that sense.

It most certainly can get confusing. Pub 17 appears to disagree with your analysis, if indeed I understand what you and the pub. are saying. The rules do not seem to apply only in cases where two people claim the same qualifying child. If mom made 8000 and grandma made 6000, and for some reason mom did not claim the EIC ... then it would appear neither could grandma unless she made more than 8000.

[TaxGuyBill]

I agree with you. Tiebreaker rules ONLY apply if more than one person claims a "qualifying child".


However, one of the criteria of claiming a "qualifying child" is that a non-parent can only claim the child if the "adjusted gross income of such taxpayer is higher than the highest adjusted gross income of any parent".

http://www.law.cornell.edu/uscode/text/26/152#c_4_C

If the non-parents AGI is less than the parents, the child is NOT a "qualifying child" (but could be a qualifying relative).

[S T]

Tie-Breaker Simplified for one scenario

Okay - how do we determine, when the Father and Mother are not married, but live together. On child age 2

Father has higher AGI, mother has lower AGI

Who claims? According to TTB chart, Father can claim HOH (due to AGI) Mom/Dad are tied for the exemption, CTC, EIC and Dependent Care

So it is at the discretion of working both returns and seeing who receives the highest tax benefit?

That does not seem correct?

Thanks

Sandy

[ddoshan]

Yes ... when unmarried parents live together with a child or children you generally do want them to come in together so you can run the returns is various ways to see what works out best for all. Have done this many times.

[David1980]

I agree with you. Tiebreaker rules ONLY apply if more than one person claims a "qualifying child".


However, one of the criteria of claiming a "qualifying child" is that a non-parent can only claim the child if the "adjusted gross income of such taxpayer is higher than the highest adjusted gross income of any parent".

http://www.law.cornell.edu/uscode/text/26/152#c_4_C

If the non-parents AGI is less than the parents, the child is NOT a "qualifying child" (but could be a qualifying relative).

Yes, exactly. If child, mother, and grandmother all live together grandmother can only claim the child if grandmother has a higher AGI than mother (and mother isn't claiming the child, obviously.)

If grandmother's AGI is lower than mother's AGI grandmother cannot claim that child. Regardless of whether the mother claims the child or not. This rule is listed by the IRS under tie-breaker rules, so I suppose you could consider it a mandatory tie-breaker. I think the tax code actually lays it out simpler in this specific case.

[ddoshan]

If grandmother's AGI is lower than mother's AGI grandmother cannot claim that child. Regardless of whether the mother claims the child or not. This rule is listed by the IRS under tie-breaker rules, so I suppose you could consider it a mandatory tie-breaker. I think the tax code actually lays it out simpler in this specific case.

That's why I did think of it as under the tie breaker rules even if it is not a situation where two people try and claim a child. Although it doesn't seem to quite make sense, at least to me.