I Hate Dependent Laws

[New York Enrolled Agent]

It was stated in the original post that the child was always living with Mom, who lived eight months with Dad and four months with Gramma. However the law allows mother to give the dependency exemption to the Father at her discretion. I think she could even give the exemption to you or me if so inclined.

I do NOT believe what you are saying is true. A custodial parent can release a child's exemption to a non-custodial parent under the special provisions of §152(e). The Tax Court has ruled that the parents are not required to have ever been married (King 121 TC No. 12). HOWEVER, the only provision in §152(e) that provides this for never-married biological parents, requires that the parents have lived apart at ALL TIMES during the last six months of the calendar year. The original post stating they lived together for 8 months CLEARLY prohibits using §152(e). Thus mom cannot release the child's exemption to dad or anyone else. The rule simply does not apply.

Since the child satisfies all 4 of the requirements with respect to both mom & dad, the child is a qualifying child of both parents. Thus IMO, if the parents are in agreement, the child can be claimed by either parent. If they don't agree and both tried to claim the child, then §152(c)(4)(B) would give the exemption to the mom as the parent with whom the child resided for the longest period of time during the calendar year. That is the first tie-breaker rule for parents and would apply.

[BP.]

So, this is what I plan on doing.. Mom (child's mother) says she is taking the child as dependent. I do not do Mom's (child's mother's) tax return. Father will claim HOH with no dependency and list childs name and SS on line 4. And that is that.

Dad can't be HOH w/o claiming child. Child is QC of more than one person. See TTB 3-17 bottom left.

[BOB W]

I do NOT believe what you are saying is true. A custodial parent can release a child's exemption to a non-custodial parent under the special provisions of §152(e). The Tax Court has ruled that the parents are not required to have ever been married (King 121 TC No. 12). HOWEVER, the only provision in §152(e) that provides this for never-married biological parents, requires that the parents have lived apart at ALL TIMES during the last six months of the calendar year. The original post stating they lived together for 8 months CLEARLY prohibits using §152(e). Thus mom cannot release the child's exemption to dad or anyone else. The rule simply does not apply.

Since the child satisfies all 4 of the requirements with respect to both mom & dad, the child is a qualifying child of both parents. Thus IMO, if the parents are in agreement, the child can be claimed by either parent. If they don't agree and both tried to claim the child, then §152(c)(4)(B) would give the exemption to the mom as the parent with whom the child resided for the longest period of time during the calendar year. That is the first tie-breaker rule for parents and would apply.

The child dependency can go to MOM, that is OK. What I'm now looking for is HOH for unmarried DAD. Can Dad be HOH?

As I mentioned in one of my posts, even after Mom moved out there was still many days per week where Mom and Child stayed at Dad's house. It is a fact that Mom did not provide support for child nor maintain a home for child, Dad did. Dad continued to pay $200 a week while Mom and child were at Grandma's house. That is all real facts.

Dad is selling house in 2008, short sale, and Mom, Dad and child are getting back together (unmarried) in rental apartment.

This is enough to get me out of this tax business. I don't like my tax work to come back reversed by IRS because of unclear laws, at least unclear because of my failure to understand HOH and dependency as written.

Upon reviewing TTB 3-18 flow chart, "more that half the year" seems to qualify my Dad client for HOH along with having a qualified child and child NOT being claimed as a dependent...Am I reading this correct???

[BP.]

Can Dad be HOH?

Upon reviewing TTB 3-18 chart, "more that half the year" seems to qualify my Dad client for HOH along with having a qualified child and child NOT being claimed as a dependent...Am I reading this correct???

No, dad can't be HOH. No, you aren't reading the chart correctly. New York Enrolled Agent correctly analyzed your case and demonstrated that the rules for divorced and separated parents do not apply here. (Ref pub 17 p. 34, #1, c- Lived apart last 6 mos of the year test is failed.) Look at the chart you have referenced on TTB 3-18, right hand column of boxes, second box from bottom. The answer there in your case is no, so the next box provides your answer: no HOH. Refer instead to TTB 3-17 for the rules that do apply in your case- the rules for a qualifying child of more than one person. That should give you the answer you need.

[BOB W]

No, dad can't be HOH. No, you aren't reading the chart correctly. New York Enrolled Agent correctly analyzed your case and demonstrated that the rules for divorced and separated parents do not apply here. (Ref pub 17 p. 34, #1, c- Lived apart last 6 mos of the year test is failed.) Look at the chart you have referenced on TTB 3-18, right hand column of boxes, second box from bottom. The answer there in your case is no, so the next box provides your answer: no HOH. Refer instead to TTB 3-17 for the rules that do apply in your case- the rules for a qualifying child of more than one person. That should give you the answer you need.

His post is only talking about giving up the dependent to another person...???

I never have to get to that box because I can answer YES at the right hand column 4th box (from bottom)

[BP.]

I never have to get to that box because I can answer YES at the right hand column 4th box (from bottom)

The child is QC to both parents, but only one can treat the child as QC. (Sorry, broken record time: TTB 3-17: If QC of more than one person, only one can claim child as QC for all tax benefits . . . ) So if Mom claims child, you must answer no to your question.

[New York Enrolled Agent]

No, dad can't be HOH. No, you aren't reading the chart correctly. New York Enrolled Agent correctly analyzed your case and demonstrated that the rules for divorced and separated parents do not apply here. (Ref pub 17 p. 34, #1, c- Lived apart last 6 mos of the year test is failed.) Look at the chart you have referenced on TTB 3-18, right hand column of boxes, second box from bottom. The answer there in your case is no, so the next box provides your answer: no HOH. Refer instead to TTB 3-17 for the rules that do apply in your case- the rules for a qualifying child of more than one person. That should give you the answer you need.

I'm going to disagree with BP on the HOH issue. I only addressed the exemption issue in my post and not the filing status.

IMO - Dad is entitled to file HOH as per §2(b). Dad maintained a home for more than ½ the year which was the principal abode for a qualifying child. The qualifying child is not required to be a dependent. There is nothing in §2(b) requiring this.

Look at the 2007 1040 booklet instructions on page 13 - Test 2. Item #2 says your unmarried qualifying child who is NOT your dependent. (caps added).

Dad can file HOH - no exemption for child.
Mom files single - takes the exemption and all the other goodies that follow.

[BP.]

Look at the 2007 1040 booklet instructions on page 13 - Test 2. Item #2 says your unmarried qualifying child who is NOT your dependent. (caps added).

OK, 1040 inst, p. 13, going through the tests you mention. Going in numerical order under test 2, let's back up from item 2 to item 1(a), which parenthetically has us reference p. 15 to define a QC. OK, flip to p. 15, we get to the bottom of our chart to see we need to go to p. 17 if we have a child who is the QC of more than one person. And there we are brought to our rule. Spelled out for us. How do you reconcile this rule and still give dad HOH?

[BOB W]

How can laws be written to cause two sections to have two separate answers. I respect BP and NYEA. Both have "in your face" reading material and each have different answers. The Flow Chart is from the IRS and reading the left column's YES/NO it says I can take the HOH status for my client. What a mess...................

[BP.]

Since the child satisfies all 4 of the requirements with respect to both mom & dad, the child is a qualifying child of both parents.

I support your reasoning here. And if you follow your own reasoning, (child is QC of both parents), how do you stop short of applying the appropriate test? Inst for 1040 p. 17 right hand col.

[New York Enrolled Agent]

OK, 1040 inst, p. 13, going through the tests you mention. Going in numerical order under test 2, let's back up from item 2 to item 1(a), which parenthetically has us reference p. 15 to define a QC. OK, flip to p. 15, we get to the bottom of our chart to see we need to go to p. 17 if we have a child who is the QC of more than one person. And there we are brought to our rule. Spelled out for us. How do you reconcile this rule and still give dad HOH?

I don't think you can "go back" to item 1(a).

First, the IRC §2(b) doesn't require the child to be a dependent. That's enough for me.

However, for purposes of our dialogue, let's go back to item 1(a). Item 1(a) is NOT APPLICABLE in this discussion. Item 1(a) refers to the special rule in §152(e). The facts of the original post PROHIBIT use of that special rule. The parents were never married and did NOT live apart for the last 6 months of the year. Thus §152(e) does NOT apply. Thus, IMO, item 1(a) is not relevant to this discussion.

Page 13 - Test 2 says that ONE of the following must hold. Either item 1 OR item 2 OR item 3 OR item 4. Bob's taxpayer dad satisfies the condition of item 2. Item 1(a) does not apply.

[BP.]

I am in agreement that the rest of the language of Test 2 item 1(a) itself doesn't apply, as you demonstrated. But we still have to define a QC first. That's the starting point, right? Or else what's the point of the rule for QC of more than one person?

So we're reading through these tests, and we have to see if we have a QC ("as defined in step 1 p. 15") So I would go through the steps I outlined. (1040 inst p. 15, then p. 17)

At this stage we'll agree to disagree . I wouldn't choose HOH for dad w/o dependent here.

[Gene V]

I haven’t study all the above posts. However, I'm thinking, if mom takes the dependency and gets EIC, then dad cannot take H of H. Per Pub. 17 page 236 Rule 9.

[Jesse]

I haven’t study all the above posts. However, I'm thinking, if mom takes the dependency and gets EIC, then dad cannot take H of H. Per Pub. 17 page 236 Rule 9.

I think Gene is correct here.

BP is correct in that first you have to define if this is a qualifying child of BOTH parents.

If QC of both and Mom takes child for credits Dad needs to go single. You can not split HOH and credits if both have same qualifying child.

Is this a QC for both parents? If the rule is decided by where the child physically resided for > than 6 months yes and tie breaker then would go to Dad because he has the highest income. If it is where physically resided for the greatest amount of time, then tie breaker goes to Mom.

Burton Koss where are you?

[tpert]

I wouldn't choose HOH for dad w/o dependent here.

I totally agree that this is the correct handling for this scenario.

Although I disagree with their basis for it, the IRS has repeatedly held that there is only one scenario where two parents can split the five benefits of a QC. If this is a QC of both, only one parent may qualify for all five benefits, which includes HOH.