Childs Charitable Contributions

[equinecpa]

Can a taxpayer claim the charitable contributions made by his/her dependent child? The child does not file their own tax return.

[erchess]

The way I see it

the taxpayer can deduct the child's contributions so long as the funds provided for the child's support by the parent are more than sufficient to cover the child's contributions. Normally this is the case if the child is not required to file. However, let's suppose that the child has a trust fund. If the child made donations out of the trust then clearly those donations go on the trust's tax return.

[equinecpa]

Do you happen to have a cite for me to refer to?

In this particular circumstance the child is actually 22 but disabled. He works and received W-2 compensation of approx $4,000. Child's tithes were $500.00.

[erchess]

Working on it

I have just purchased and am in the trial period with CFS Tax Tools Research Package. I could not find a cite so I have emailed CFS for assistance. I will post again when I have something for you. I appreciate the opportunity to test my software on a real case. If you're in a hurry maybe you can get help elsewhere.

[Bees Knees]

A taxpayer can deduct medical expenses paid on behalf of a dependent [Section 213(a)]. There is no similar language in Section 170(a)(1) for charitable contributions.

[ChEAr$]

childrens' deductions

The way I learned it is that a parent may deduct ONLY medical expenses of a child who is an exemption, and no other taxes, contributions, etc. After all, the regulations refer to all those other deductions as "by" the taxpayer, meaning on a joint return, both parents.

And, I think, that even if a pregnant 17 year old depend exemption paid her gynocologist
without knowledge of parents, even if parents found out about it (you fill in the blanks), they
can not claim the expense, since they didn't pay it.

[erchess]

I don't see

how the medical expense issue is at all analogous. In the OP the dependent child made a contribution and the parent wants to deduct it. In the cases you are discussing the child incurred medical expenses, and we all agree that if those were paid by the parent, the parent can deduct the expense whether or not the child is a dependent, so long as the parent is supporting the child.

I know two things about the case in OP.

1. I have worked for two different storefront firms where the contributions made by minor children to churches to which the parents also donated were routinely included in the parents' contributions. I recall that one church issued statements to the parents that showed what monies had come from whom but totaled it all with a notation that this was the parents' figure for tax purposes.

2. I can't find anything in my online tax library that is on point but this is my first search of that library and I have emailed tech support for their input. I do know that without specific authority there is no deduction because all income is taxable unless specifically exempted and no expenses are deductible unless specifically allowed.

[George Boutwell]

King James Meets Internal Revenue Code

Render unto Caesar the things which are Caesar’s, and unto God the things that are God’s, except what you give God you can let your parents deduct, even if it comes out of your earnings.

Or something like that.

Disabled or not, if the kid is old enough and competent enough to do some work and go to church, the money came out of his pocket and not his parents'.

[jainen]

that kind of guess

>>contributions made by minor children to churches to which the parents also donated were routinely included in the parents' contributions<<

I don't see any problem with this. Technically the minor can't own anything anyway, so unless the donation is being made from a trust (though most trusts wouldn't allow it) the parents are probably giving the child the money in the first place.

However, it's a different story with a legal adult, even if he meets the definition of disabled qualifying child for tax purposes. Those contributions were made from the dependent's earnings and aren't deductible by the parent.

I tend to be hard of hearing and usually misunderstand when clients explain this sort of thing. So I would ask the parents if what really happened was they just gave the young man $500 to put in for the tithe, since most of his own money is used up by the shared housing costs. I have a remarkable record for being right about that kind of guess.

[New York Enrolled Agent]

Question - is this child really a dependent? Clearly, he cannot be a qualifying relative due to the gross income test. You say he is disabled but works. To be a qualifying child for purposes of §152 at age 22, the child must be disabled and satisfy the definition in §22(e)(3). (caps added)

3) Permanent and total disability defined.
An individual is permanently and totally disabled if he is unable to engage in ANY substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months. An individual shall not be considered to be permanently and totally disabled unless he furnishes proof of the existence thereof in such form and manner, and at such times, as the Secretary may require.

It appears the threshold is quite high. I'm just curious if the conditions are satisfied.

[erchess]

>
I tend to be hard of hearing and usually misunderstand when clients explain this sort of thing. So I would ask the parents if what really happened was they just gave the young man $500 to put in for the tithe, since most of his own money is used up by the shared housing costs. I have a remarkable record for being right about that kind of guess.

We all know that money is "fungible" However, I may have failed to understand the impact of that on this case. I would have said that as long as the parents' support expenditures on the dependent are sufficient that the donation COULD have been made from their funds, then if everyone involved so agrees, we can say that for tax purposes the donation WAS made from their funds.

On the other hand, your point about the distinction between a minor child and a grown even if disabled child is a good one. So is the point someone made about this child not being able to be a "Qualifying Relative".

[George Boutwell]

From IRS Publication 501

Disabled dependent working at sheltered workshop. For purposes of this test (the gross income test), the gross income of an individual who is permanently and totally disabled at any time during the year does not include income for services the individual performs at a sheltered workshop. The availability of medical care at the workshop must be the main reason for the individual's presence there. Also, the income must come solely from activities at the workshop that are incident to this medical care.

A “sheltered workshop” is a school that:

Provides special instruction or training designed to alleviate the disability of the individual, and

Is operated by certain tax-exempt organizations or by a state, a U.S. possession, a political subdivision of a state or possession, the United States, or the District of Columbia.

[OldJack]

A taxpayer can deduct medical expenses paid on behalf of a dependent [Section 213(a)]. There is no similar language in Section 170(a)(1) for charitable contributions.

I agree with Bees Knees. All this talk about dependent's gross income or disability is irrelevant. Only the taxpayer that actually made the contribution can deduct the contribution. If the kid made the contribution the parent can't claim the deduction even if the parent gave the money to the kid with intent/instructions for the kid to make the contribution. As Bees says.. thems the rules.

[jainen]

the fat lady

>>the parent can't claim the deduction even if the parent gave the money to the kid<<

Uh-uh. The parent is simply making the donation through an intermediary or agent. It's no different than passing your envelope down to the end of the pew for the fat lady to put in the basket.

[OldJack]

Uh-uh. The parent is simply making the donation through an intermediary or agent. It's no different than passing your envelope down to the end of the pew for the fat lady to put in the basket.

Uh-Huh. The check was not written by the fat lady and in the case we are discussing the kid wrote the check so its the kids deduction.