Divorce Form 8332 Needed?

[geekgirldany]

Husband and wife divorce was final in Oct 2016. They lived together until August 2016 with their two children. Divorce decree states that husband can claim Child 1. Wife was given full physical custody.

I am thinking that Form 8332 is not need for tax year 2016 since the children lived with the husband for more than 6 months of the year and he did provide for them. Plus he will be able to claim head of household filing status and CTC.

Is my thinking correct on this?

[kathyc2]

Husband and wife divorce was final in Oct 2016. They lived together until August 2016 with their two children. Divorce decree states that husband can claim Child 1. Wife was given full physical custody.

I am thinking that Form 8332 is not need for tax year 2016 since the children lived with the husband for more than 6 months of the year and he did provide for them. Plus he will be able to claim head of household filing status and CTC.

Is my thinking correct on this?

Agree with not needing 8332 since child lived with him over 6 months. HOH depends on circumstances. Did he pay over 1/2 the annual cost for the home in which the children live?

[geekgirldany]

Thank you posting.

On HOH, he did pay over half cost of keeping up the home. The wife did not work.... but will double check on that.

[taxmom34]

you said wife had full physical custody, that tells me she needs to give him 8332 so he can claim child 1 as a dependent, however, the two children lived with her the whole year. even if no argument he has to take child as dependent not living with him (8332). wife did not work ? will she be filing a tax return?

[New York Enrolled Agent]

Husband and wife divorce was final in Oct 2016. They lived together until August 2016 with their two children. Divorce decree states that husband can claim Child 1. Wife was given full physical custody.

I am thinking that Form 8332 is not need for tax year 2016 since the children lived with the husband for more than 6 months of the year and he did provide for them. Plus he will be able to claim head of household filing status and CTC.

Is my thinking correct on this?

If I read your post correctly, child 1 spent more nights with mom than dad. (I assume child 1 lived with both parents through August, then with mom for the rest of the year). Is that correct?

If so, mom is the custodial parent and the regulations for §152 clearly state that only a properly filed Form 8332 can give the exemption to the father. The divorce decree is irrelevant - the number of nights control. Perhaps I misread your post???

[TaxGuyBill]

If I read your post correctly, child 1 spent more nights with mom than dad. (I assume child 1 lived with both parents through August, then with mom for the rest of the year). Is that correct?

If so, mom is the custodial parent and the regulations for §152 clearly state that only a properly filed Form 8332 can give the exemption to the father. The divorce decree is irrelevant - the number of nights control. Perhaps I misread your post???

I disagree. The child lived with BOTH parents for at least 183 days. That means that if the parents agree, either parent has the right to claim the child (without a Form 8332). Although example #7 in Publication 501 deals with non-divorced spouses, the same thing applies. https://www.irs.gov/publications/p50...link1000220917

If you look at §152(e), Publication 501, or the Instructions for Form 8332, you will see that form applies for couples who lived apart for the last 6 months of the year (this situation they lived together until August).

[New York Enrolled Agent]

TGB - I must be missing something here. The parents were divorced. §152(e) has 3 disjunctive parts - one of which is divorced. I'm pasting from the regulations. Maybe, I'm missing something right in front of me. Let me know - I stand to be corrected.

Section 1.152-4 Special rule for a child of divorced OR separated parents OR parents who live apart.

(a) In general . A taxpayer may claim a dependency deduction for a child (as defined in section 152(f)(1)) only if the child is the qualifying child of the taxpayer under section 152(c) or the qualifying relative (N/A)). Section 152(c)(4)(B) provides that a child who is claimed as a qualifying child by parents who do not file a joint return together is treated as the qualifying child of the parent with whom the child resides for a longer period of time during the taxable year or, if the child resides with both parents for an equal period of time, (N/A)

However, a child is treated as the qualifying child or qualifying relative of the noncustodial parent if the custodial parent releases a claim to the exemption under section 152(e) and this section.

(b) Release of claim by custodial parent --
(1) In general . Under section 152(e)(1), notwithstanding section 152(c)(1)(B), (c)(4), or (d)(1)(C), a child is treated as the qualifying child or qualifying relative of the noncustodial parent (as defined in paragraph (d) of this section) if the requirements of paragraphs (b)(2) and (b)(3) of this section are met.

(2) Support, custody, and parental status --

(i) In general. The requirements of this paragraph (b)(2) are met if the parents of the child provide over one-half of the child's support for the calendar year, the child is in the custody of one or both parents for more than one-half of the calendar year, and the parents--
(A) Are divorced or legally separated under a decree of divorce or separate maintenance;
(B) Are separated under a written separation agreement; or
(C) Live apart at all times during the last 6 months of the calendar year whether or not they are or were married.

(ii) N/A

(3) Release of claim to child. The requirements of this paragraph (b)(3) are met for a calendar year if--

(i) The custodial parent signs a written declaration that the custodial parent will not claim the child as a dependent for any taxable year beginning in that calendar year and the noncustodial parent attaches the declaration to the noncustodial parent's return for the taxable year; or

(ii) A qualified pre-1985 instrument, N/A

[taxea]

I disagree with his filing HOH as they lived together as husband and wife until she moved out. You don't have 6 months of legal separation for 2016. He can take the kids but I would get the 8332 signed and keep it in your file as a just in case it is needed. IRS trumps court orders. If she got legal custody then get an 8332.

[geekgirldany]

Thank you all for taking the time to post. I truly appreciate it.

You are right, HOH is out, they did not live apart more than six months. I totally forgot about that.

For tax year 2016 Form 8832 would technically not be required because the children (he is only going to take one child) lived with him more than six months.
In the end though, as taxea mentioned, it would be best to go ahead and get the release.

Plus he will get the CTC and with the due diligence requirements it would probably be best to get Form 8832 and attach to the return.

[kathyc2]

Thank you all for taking the time to post. I truly appreciate it.

You are right, HOH is out, they did not live apart more than six months. I totally forgot about that.

.

The 6 month rule would be if they were simply separated but not divorced. I believe HOH would go to which of them paid the highest percentage of the annual cost of maintaining the home.

[TaxGuyBill]

New York Enrolled Agent, I completely understand what you are saying. I agree that is what the Code says ("the child resides for a longer period of time") and that Regulation says. However, the Proposed Regulation §1.152-2 (which were recently withdrawn and reissued) says differently (that is where Publication 501 is getting the examples from). I did not realize that they were only Proposed Regulations, but the fact that Publication 501 cites examples from it shows me that the IRS agrees with it.

(g) Child who is eligible to be claimed as a qualifying child by more than one taxpayer—
(1) In general. Under section 152(c)(4), if an individual satisfies the definition of a qualifying child for two or more taxpayers (eligible taxpayers) for a taxable year beginning in the same calendar year, the following rules apply.
(i) More than one eligible parent. If more than one eligible taxpayer is a parent of the individual (eligible parent), any one of the eligible parents may claim the individual as a qualifying child. However, if more than one eligible parent claims the individual as a qualifying child, and those eligible parents do not file a joint return with each other, the individual is treated as the qualifying child of the eligible parent claiming the individual with whom the individual resides for the longest period of time during the taxable year as determined under §1.152-4(c)(3). If the individual resides for the same amount of time during the taxable year with each eligible parent claiming the child, the individual is treated as the qualifying child of the eligible parent with the highest adjusted gross income who claims the individual.

https://s3.amazonaws.com/public-inspection.federalregister.gov/2017-01056.pdf#page=54

Then Example #2 in that Proposed Regulation (a couple of pages down) shows that the parent who had the child for fewer nights (but over 183) can claim the kid if the other parent doesn't claim the kid.


So the way I read it, under the Proposed Regulations, §152(e) and §1.152-4 only come into play if the child does not live 183 nights with the parent claiming the exemption. Because they are only "Proposed" Regulations they do have less authority, but in my opinion the IRS will rely on them.

Any thoughts?

[geekgirldany]

The 6 month rule would be if they were simply separated but not divorced. I believe HOH would go to which of them paid the highest percentage of the annual cost of maintaining the home.

Ugg, yes. TTB says the 6 month rule for married people to be considered unmarried. They were divorced before the end of the year but to qualify for HOH he must of had the children for more than half the year which was when he was still married. It is like which came first the chicken or the egg.

What has thrown me off is that they lived together until Aug 2016 but divorce final in Oct 2016. So the normal way I would go about looking at this isn't working. Plus being tired doesn't help.

[New York Enrolled Agent]

TGBill

I don't disagree that If more than one eligible taxpayer is a parent of the individual (eligible parent), any one of the eligible parents may claim the individual as a qualifying child

However these parents are divorced. That requires we use the special rule in §152(e) - with its restriction on qualifying child.

(e) Special rule for divorced parents, etc.

(1) In general
Notwithstanding subsection (c)(1)(B), (c)(4), or (d)(1)(C), if -

(A) a child receives over one-half of the child's support during the calendar year from the child's parents -

(i) who are divorced or legally separated under a decree of divorce or separate maintenance,
(ii) who are separated under a written separation agreement, or
(iii) who live apart at all times during the last 6 months of the calendar year, and -

(B) such child is in the custody of 1 or both of the child's parents for more than one-half of the calendar year, such child shall be treated as being the qualifying child or qualifying relative of the noncustodial parent for a calendar year if the requirements described in paragraph (2) or (3) are met.

Paragraph (2) is Form 8332 and Paragraph (3) is N/A (pre-1985)

The code obviously supersedes everything else. I still may miss something but I don't see how a Form 8332 is not required.

[Lion]

It's your normal way, just that the "nights" you count overlap. If the parents cooperate and only one claims the child, then all is well. But, they are divorced, so why should you trust the ex who owes you nothing?! Get the 8332 to cover the butt of the parent who had the child the fewer number of nights -- and to cover YOUR butt. I'd rather have it and never need it than to try to document three years later.

[TaxGuyBill]

Regulations expand and explain the Code. The way I understand it, the Proposed Regulation that I cited explains that §152(c)(4) applies if more than one person actually try to claim the child. So other references to §152(c)(4) would need to take into account that Regulation.


The way I interpret your most recent citation of §152(e)(1) is that Form 8332 would overrides everything, including 152(c)(1)(B) and §152(c)(4). In other words, (1) if the child lives with a parent less than 183 days, Form 8332 allows the dependent (based on §152(c)(1)(B)), and (2) if BOTH parents actually try to claim the child, Form 8332 overrides the 'nights' rule and could give the dependent to the parent with the fewer nights (based on §152(c)(4)).

I don't see it saying that the 'usual' rules don't apply if the parents are divorced, etc.. I don't see it saying that Form 8332 would be required even if the 'noncustodial' parent satisfies the requirement of §152(c) [including the explanation in the Proposed Regulation]. To paraphrase §152(e), I would say it says "In spite of the usual rules ... a child of divorced parents ... shall be treated as being the qualifying child of the noncustodial parent ... if Form 8332 is used".


On other hand, Form 8332 will be required in future years, so they might as well get Form 8332 now. :-)


As a side note, I really hope I don't come across as argumentative. That is definitely NOT my intention. I just enjoy a good discussion and trying to figure out what the gobbledygook of the Code and Regulations mean. If I ever come across as argumentative, please just tell me to back down (I tend to get a bit too passionate about my opinions at times). :-)