How many dependents can be claimed?

[thomtax]

I know this has been discussed to death. I havey my thoughts, but am now questioning my decision. All thoughts will be appreciated.

For 2015:
Client filing as MFJ. Bankruptcy is currently being filed and the answer to this question will determine which class of bankruptcy is claimed.

Living with client is a married couple who will be there all year. Neither adult will have any income during the year. (I don't know why?) Also living there will be the couple's two children. The client has guardianship of one child and is working on getting the other child's guardianship. The people living there are not directly related to the client.

I've seen the arguments, pro and con, as to whether a grandmother can claim grandchild if daughter with no income lives there also, concerning whether someone else is qualified to claim the child. So this has me questioning my decision.

Thanks in advance to all.
LT

[mooretax]

claiming dependents

See page 26 - 36 of 2014 publication 17

http://www.irs.gov/pub/irs-pdf/p17.pdf

[David1980]

Somewhere between 0 and 4?

"The people living there are not directly related to the client."

That effectively brings you to the Qualifying Relative rules since none of the potential dependents will meet the relationship test for Qualifying Child rules.

So the question will be the four tests to be qualifying relative. Not a qualifying child of another taxpayer - sounds like the parents aren't required to and won't be filing a tax return so that one is okay. Must be related to you or live with you as a member of the household the full year. Sounds like they all live with taxpayer the full year. The person's gross income for the year must be less than $3,950. Sounds like the potential dependents have no income. And finally taxpayer must provide over half the support. That's the one I'd worry the most about.

Does taxpayer's income make sense for supporting six people? Are there other sources of support other than taxpayer? Etc...

But assuming all tests are met - sure, dependents as qualifying relative. Of course that means the children won't qualify taxpayer for CTC or EIC.

[Corduroy Frog]

Wha..........

ThomTax, where do you FIND these people???

[Burke]

I sympathize.....being a good-deed-doer and taking on the relative of a former co-worker now deceased who has a "simple" return. Turns out not so simple....it happens, and you kick yourself. Forgot to tell me about prior IRS issues.

[BP.]

Forgot to tell me about prior IRS issues.

I ask point-blank up-front.

[origun]

Health Insurance

And there's the question...do they all have health insurance? If not, won't the taxpayer be penalized if dependents on return? Maybe taxpayer would be better off not claiming.

[thomtax]

Thanks for all the replies. And I was overlooking the part about the ACA tax - Thanks.

As to where do I get these clients question, this is a long time client who usually is a W-2 only client. Throughamedical bills for operations, loss of income during them, and seemingly the perfect storm, has gotten into this situation.

LT