Recently there was a court case for 2003 ( Boltinghouse TC Memo 2007-324) involving the exemption for a child who was over 18, the age of majority in that state. The judge ruled that the father could not claim an exemption under the special rules for divorced or separated parents because the kid was emancipated. As the father could not prove he provided more than 50% of the kid's support he could not claim the kid. However with the new UDC rules it seems to me this is irrelevant. Now if the child does not provide more than 50% of support then one parent or the other can claim the exemption regardless of support. If they agree who it is then we are all set. If they can't agree and both claim then the IRS gets into tie breakers. Do I ahve this right?
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Not enough info. See TTB p. 3-15- QC #6- Age test. You mention the child is over 18. Is the child a student? -
Child is a student
Yes, child is a studentComment
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I agree with you the 50% support test predated the UDC rules in that case. However, the divorced spouse rules predate the UDC rules and were not changed significantly by them. The issue as I read it is that there is no custodial parent when the child is of emancipation age, hence Form 8332 is invalid for transfering an emancipated child from the custodial parent, since none exists.Originally posted by Kram BergGold View Post
Thus, bringing it forward to 2007 (or 2006 or 2005), I would say that if the divorced or separated parents rule does not exist, then we would go back to the UDC rules.
So if two parents have a child and the two parents get divorced, regardless of the divorce decree, the custodial parent can only transfer the child to the noncustodial parent until the child is of majority age for more than half the year. Once the child reaches majority age, the concept of custody expires and the rules for divorced or separated spouses no longer applies. Thus, at that point, if the child is living with one parent and not living with the other, of the two the only one who can claim the child is the one with whom the child lived more than half the year.
In the example you gave (if I understand it) for an emancipated student who lived with one parent and not the other, only the parent he lived with can claim him as a dependent (as a QC). The child does not meet the residency test for the other parent. The divorced or separated spouse rules no longer apply and I don't see any rule that allows a noncustodial parent to claim a child who does not live with him except the qualifying relative rules and those won't apply if the child is someone's qualifying child.Last edited by tpert; 01-29-2008, 12:29 AM.Comment
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I would be careful about this the way you described this.Originally posted by Kram BergGold View Post
The tie-breaker rules only apply when two or more taxpayers claim the same Qualifying Child. From your description, this is only the Qualfying Child of one taxpayer and the divorced or separated parents rule does not apply because the child has reached majority age. Thus, since only one person can claim the Qualifying Child, I would not see the IRS applying the tie-breaker rules here, they would give the child to the parent who can claim him as a Qualifying Child.
Just like I can't legally let my next door neighbor claim my children or allow some stranger to claim them for a fee, I don't think you can just give a Qualifying Child to the spouse who does not satisfy the residency requirements just because you don't expect it would get caught by the IRS.
Perhaps you could do this if the child does not live with either spouse (or any other potential claimer) for more than half the year. If that is the case, the child would not be anyone's Qualifying Child and would qualify as a Qualifying Relative of the taxpayer who could show he/she provided more than half the support, but that is not the scenario I thought you were describing.DougComment
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College Student
I think it is what he's describing. The student lives with mom, let's say, when home for the summer and pays her own bills during that time with excess financial aid funds provided by dad. During the school year, student lives on campus. Dad pays 100% of college costs including room & board and books with cash and parent loans. Does mom get to claim the student? Or, does the student live with dad for more than half the year due to dad paying for the campus apartment? Divorce decree predated UDC, so the couple's intent doesn't count for taxes?Comment
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Custody Issue
I agree with Doug that the court case stands for the proposition that there is no such thing as a custodial parent once the child reaches the age of majority. If there is no custodial parent, then the "special rules for children of divorced or separated parents" are not applicable, and Form 8332 cannot be used to transfer the exemption to the custodial parent.Originally posted by Lion View Post
The divorce decree may "predate" UDC, but this has nothing to do with UDC. The divorce decree is meaningless. Regardless of what the divorce decree says about who has "custody" of the child, the IRS defines custody as that parent with whom the child actually lived for more than half the year. And regardless of what the divorce decree says about who gets to claim the exemption, the IRS takes the position that the custodial parent--as that term is defined by the IRS, not as the term is defined by the divorce decree--gets to claim the exemption and all other tax benefits, unless they release the exemption and the child tax credit to the noncustodial parent using Form 8332. All of this predates UDC, and it has not changed.
In the post cited in the box above, Lion refers to the student living on campus, and to the fact that Dad (presumably the "noncustodial parent") may be paying the bills for the campus housing. That's interesting, and it suggests that Dad may meet the support test. But it doesn't make Dad the "custodial parent," 'cause the court said there is no custodial parent of an child who is legally considered an adult.
So yes, Dad might be able to claim the dependent exemption under the rules for qualifying relative, on the theory that he meets the support test. The problem is the residency requirement for qualifying relative. Paying for the kid's housing doesn't mean the kid is living with Dad.
As a devil's advocate, I would argue that the 18 year old is still the qualifying child of the mother, and therefore cannot be the qualifying relative of the father, because:
- the child was living with the mother until he went away to college
- living in campus housing is a temporary absence, especially if the kid goes home to Mom over the summer when they shut down the dorms
- therefore the child is still living with Mom for the entire year; he's just away at school
- residency with Mom makes him a qualifying child
Burton M. Koss
koss@usakoss.netBurton M. Koss
koss@usakoss.net
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The map is not the territory...
and the instruction book is not the process.Comment
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Koss
As I have gone over this case I think the judge was making a statement about legal custody. At this time legal custody is never an issue. The IRS only cares aobut physical custody. So and 18 year old, although no one has legal custody of, one parent will usually have physical custody and therefore the 18 year old can be their qualifying child.Comment
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Son is a relative who does not have to live with you for QR.Originally posted by Koss View PostComment
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Regardless of which kind of custody it "appears" they were caring about, the IRS disqualified the 8332 signed by the parent with whom the child lived. What that tells me is that they used local law to determine that the mother did not have custody of the daughter because, although the daughter lived with the mother, the daughter was above majority age for more than half the year. Since the mother did not have "custody" of this daughter (even though they lived together), the mother could not transfer the dependent to the noncustodial parent using the rules for divorced or separated spouses.Originally posted by Kram BergGold View Post
Your last sentence says it all, the child over majority age is a Qualifying Child of the parent with whom that child lives more than half the year. From what I understood of the scenario you described, that parent is not the father.DougComment
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A thought. If emancipated then is he no longer their "child"?JGComment
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custody of older child
Does anyone know if the original divorce decree is relevant if the child is 19? My original decree in 1997 specified my ex to claim my daughter (now 19) and me to claim my son. We verbally agreed to swap kids on taxes 2 years ago. She is 19, a full time student and lived with me more of the year.
My ex says he gets to claim her this year because of the terms our original decree specified. He is ignoring the verbal agreement and the fact that I have claimed her for 2 years. He wants the exemption back since he gave me full custody of our son in 2007.
A new settlement from Sept of 2007 (since she has reached the age of majority)
specified what each of us will provide for her but stupidly did not mention the tax exemptions.
He said the IRS said to attach a copy of the decree. But if she is 19 and lived with me more am I not entitled to the exemption?
How do I explain this to the IRS? Please help me understand.Comment
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The divorce decree has no say at all in who gets to claim the exemption. Under Federal tax law, the custodial parent ALLWAYS gets to claim the exemption, unless the custodial parent signs over the exemption to the non-custodial parent. State divorce court cannot give the exemption to your ex unless you sign it over.Originally posted by lwh1960 View PostComment
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But Bees does it make a difference once the child turns legal age be it 18 or 19? Can the custodial parent then let the noncustodial parent take the kid by way of 8332?Comment
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custody of older child
Thank you. One more question. Is the custodial parent defined as who the child resided with most of the year?
My daughter was away at school (2 hours away) she stayed with me all summer vacation.
We originally had joint custody (every other week). If school is considered a temporary absence would she be considered to have lived with me half of the year plus the 3 months she actually lived with me? Will the IRS consider me the custodial parent even if my ex attaches the original decree? What will the process be if we actually both claim her? Because I dont think he will not file with her as his dependent.
Thanks again so muchComment
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