Qualifying Child/Relative

[Brian EA]

tom and ashley are an unmarried couple. they have been together for 2 years. ashley has a child, tommy age 4, from her previous marriage. they live as a family in a house that tom owns. tom earned $37,000 in 2005 while ashley had no earned income because she stayed home to care for the family.

can tom claim ashley and tommy as his dependents?

[Bees Knees]

No for Tommy. Maybe for Ashley.

TTB, page 3-16, 8th single parent situation down: The boyfriend cannot claim Tommy as a dependent, nor use Tommy for any of the other benefits (HOH, Child Tax Credit, etc.). The reason is, the boyfriend is not the parent. Tommy could only qualify under the qualifying relative rules, since he lived with the boyfriend for the entire year. BUT, the qualifying relative rule gets kicked out under test #5 (listed on page 3-15 in TTB) because Tommy is a qualifying child of Ashley, his mother.

As to being able to claim Ashley as a dependent, she could be his qualifying relative for purposes of the dependency test as long as the relationship does not violate local law. She does not give him HOH status.

[RLymanC]

Dependent

Might add that Ashley could release Tommy to the other parent (if he can be found, and she is willing) using Form 8332. Tommy is of no use to either Tom or Ashley as a tax deduction. The other parent would then qualify for the CTC and dependent exemption.

[Snaggletooth]

Sale of Kids

...or maybe Ashley can "sell" Tommy's social security # to someone else.

Just think...Tom and Ashley have no earthly use for Tommy on their tax return. No dependency, child tax credit, EIC, HOH status....no use at all. However, Tom's cousin, Ronnie and his wife Paula, could use him big time.

Ronnie works under the table at odd jobs and sells pot when he can, and brings in $400/wk in unreported income. His wife Paula works at Wal-Mart, and gets a W-2 for
$12,000 at the end of the year. They have no children, and of course no medical insurance so when they are sick they just go down to the local emergency room with dozens of other uninsured people and state medicaid pays the hospital.

Back to Tom and Ashley. In September, Tom's van breaks down, and they very desperately need $1000 to fix it. Tom has some of the money, but hits up Ronnie for $400. Ashley says if Ronnie will give them $400 to fix the van, she will give Ronnie the social security # for Tommy, and will promise not to use him on Tom's tax return this year. This means Ronnie and Paula can claim Tommy as a dependent (which would be of little value at their income level), child tax credit (also of little or no use), and the biggie,
Earned Income Credit of some $2600!

Paula takes her W-2 down to a tax preparer (who doesn't know her personally), and tells them this is all the money they made, and that Tommy is their son. Tom and Ashley make no claim on their tax return for Tommy, knowing that this could tip off the IRS computer of the fraud. Paula and Ronnie end up with a $3000 refund, and walk out of the tax office with an RAL check for $2650 and are deliriously happy.

Yes, folks, this happens!! If one of these folks walks in YOUR office, and you have knowledge or overwhelming suspicion of the scheme - better send them packing. IRS will put YOU in jail before Tom, Ashley, Ronnie, or Paula.

[Ken]

qualifying dependent

I may be wrong, (It sometimes happens), But I just went online and read that you could claim Tommy as a dependent if he met the 5 rules. Now that doesn't mean he qualifyies for all the tax credits, just the dependency deduction.
I thought this was right, but I went online to check and make sure. Now you all are probably talking strickly taking him as a dependent for all the tax credits and I am only saying he qualifys as a dependent for the personal exemption.

[Bees Knees]

I may be wrong, (It sometimes happens), But I just went online and read that you could claim Tommy as a dependent if he met the 5 rules. Now that doesn't mean he qualifyies for all the tax credits, just the dependency deduction.
I thought this was right, but I went online to check and make sure. Now you all are probably talking strickly taking him as a dependent for all the tax credits and I am only saying he qualifys as a dependent for the personal exemption.

Tom cannot claim Tommy as a dependent under the new rules (the old 5 rules no longer apply). The reason is Tommy is not Tom's son. So the only chance Tom has of claiming Tommy as a dependent is under the qualifying relative rules. Under the qualifying relative rules, Tommy cannot be a qualifying child of another person. Since Tommy is a qualifying child of Ashley (who doesn't need him since she makes no money), that means Tommy cannot be a qualifying relative of Tom. Therefore, as was said before, nobody gets to claim Tommy, unless of course you are one of Snag's clients involved with child leasing.

[Gary]

No. Tom is the qualifying child of Ashley, and therefore cannot be claimed for anything by the boy friend.

Gary

[Gary]

I should have said - Tommy!!!

Gary

[Bees Knees]

I should have said - Tommy!!!

That brings up another issue. Why did Ashley name her kid after her future boyfriend whom we are told is not the real father?

Is there some kind of child support fraud going on here with her ex?

[WhiteOleander]

...or maybe Ashley can "sell" Tommy's social security # to someone else.

Just think...Tom and Ashley have no earthly use for Tommy on their tax return. No dependency, child tax credit, EIC, HOH status....no use at all. However, Tom's cousin, Ronnie and his wife Paula, could use him big time.

Ronnie works under the table at odd jobs and sells pot when he can, and brings in $400/wk in unreported income. His wife Paula works at Wal-Mart, and gets a W-2 for
$12,000 at the end of the year. They have no children, and of course no medical insurance so when they are sick they just go down to the local emergency room with dozens of other uninsured people and state medicaid pays the hospital.

Back to Tom and Ashley. In September, Tom's van breaks down, and they very desperately need $1000 to fix it. Tom has some of the money, but hits up Ronnie for $400. Ashley says if Ronnie will give them $400 to fix the van, she will give Ronnie the social security # for Tommy, and will promise not to use him on Tom's tax return this year. This means Ronnie and Paula can claim Tommy as a dependent (which would be of little value at their income level), child tax credit (also of little or no use), and the biggie,
Earned Income Credit of some $2600!

Paula takes her W-2 down to a tax preparer (who doesn't know her personally), and tells them this is all the money they made, and that Tommy is their son. Tom and Ashley make no claim on their tax return for Tommy, knowing that this could tip off the IRS computer of the fraud. Paula and Ronnie end up with a $3000 refund, and walk out of the tax office with an RAL check for $2650 and are deliriously happy.

Yes, folks, this happens!! If one of these folks walks in YOUR office, and you have knowledge or overwhelming suspicion of the scheme - better send them packing. IRS will put YOU in jail before Tom, Ashley, Ronnie, or Paula.

Tommy still has no relationship to Ronnie and Paula. It must be by birth, marriage, or adoption. There is no benefit to "selling" the SS# of the child to anyone.

[RLymanC]

Hey Snag---Tommy

There is a rumor that the IRS data base is tracking where dependent children live.

If they suddenly appear on a tax return with a different taxpayer and address from the previous year .......DING DING DING!!!!!

In order to prevent massive EIC fraud they could put chips in all kids and a global positioning device to track how much time they spend at each location.

Not sure if I should leave this suggestion here,,,,,,,,,some politico will surely give it some serious thought.

At any rate I hope that Tommy's self esteem is not seriously damaged. Tommy....we love you in spite of your creating mass histeria.

[Snaggletooth]

Oleander

Yes, White Oleander, there IS a benefit of selling Tommy's #. No one said it was legal...

[Ken]

dependent qualifications

Okay I just opened that package that I got in the mail the other day and thought it was my tax program. It was my NEW TAXBOOK.

Now I have all the same answers as the rest of you guys. I wont have to go online and get last years information.

Thanks TAXBOOK

[Brian EA]

Qualifying Child/Relative

I asked this same question at a gearup seminar I attended on 12/12 - 12/13 and everyone said I can claim both as dependents. The day before I read in H & R Block Tax Update that only the girl friend could be claimed as the dependent.
Thanks for the confusion.

[Bees Knees]

I asked this same question at a gearup seminar I attended on 12/12 - 12/13 and everyone said I can claim both as dependents.

If that is what they said, they got it wrong.

The tie breaker rules under Section 152(c)(4) clearly only apply to the qualifying child rules. The qualifying relative rules of Section 152(d) do not have any such tie breaker rule. So the girlfriend cannot just not claim the kid allowing the boyfriend to do so.

The boyfriend cannot claim the child as a qualifying child because he is not related to the child. So his only chance is the qualifying relative rules. Section 152(d)(1)(D) clearly makes the point that a qualifying relative cannot be a qualifying child of any other taxpayer. No exceptions.