Filing Status

[Terry D EA]

I know this has been kicked around before but I am tired and unable to think clearly. Couple is separated and living apart from each other since 2008. Hubby claimed one child and filed HOH. As far as I can tell, the wife (my client) can claim HOH as well because she is using the other child which would be her qualifying child. Am I correct here? This stuff can get confusing real quick this late in the game. :wall:

[Kea]

That sounds right to me.

The one I was going around in circles with myself was if a foster child of a descendent could be a qualifying child like a descendent of a foster child can. Or, being a half-brother of a descendent rather than a descendent of a step-sibling. I finally decided client could not get CTC - just dependent exemption. Come to think of it, I don't remember seeing anything about "half-" relatives, only "step-" relatives.

edit -- As I was writing the above I realized that i might have been wrong in giving her HOH for qualifying relative. Return has been filed & accepted, so I had a moment of panic. Went back to my references & saw she is HOH since she has qualifying children who live with her but are not her dependents. (Client's daughter will claim them.)

Do I need to amend to show name of child who qualifies her for HOH? At this point there would be no $ change & I know IRS isn't usually interested in those. Or do I just need to explain situation to client in case IRS asks questions?

[cathyan]

Terry - Who did the children live with? For HOH "The taxpayer's household is the principal place of residence for the qualifying person for more than half the year." (Unless it isa parent you are claiming dependency for) If the children both lived with the mother, the husband should have filed single with dependent. Mother can claim HOH.

Kea - I found "brother, sister, step-brother, step-sister, half-brother, half-sister, or a descendant of any such person."

Claiming a foster child of a descendant should work for HOH, IF the descendant was living in the household when the foster child was placed.

[jainen]

>>she is HOH since she has qualifying children who live with her but are not her dependents<<

Sorry, Kea, that is not possible under the current law (since 2005). For a qualifying child of more than one person, the parent always wins under the tiebreaker rules. If the parent claims the dependent, the grandmother can not use the same qualifying child for HoH.

A foster child is treated the same as a natural child--IF (and only if) she is an "eligible foster child," that is, placed through the official county agency as opposed to any kind of private arrangement.

[Kea]

This is the same situation I posted before. The little boy is the eligible foster child of my client's daughter.

Client's daughter has court-ordered custody of the boy and her twin grand daughters. Boy is the half-brother of twin girls, but no blood relation to my client or her daughter.

All 5 live in my client's house.

The twin girls are qualifying children of their grandmother and great grandmother. (The mother of all 3 children does not live there & is not "allowed" to claim them, even though she did claim the twins. She has in the past & IRS previously awarded disputed exemption to their grandmother. Client's daughter is paper filing and including necessary documentation to claim twins.)

Yes, Jainen, I do remember the 2005 change. I was reading the above exception at 1:00 this morning in the 2010 The TaxBook. Looks like I need more research when I'm more awake.

@Terry - cathyan is right. I just kinda "assumed" that one child was living with your client since you had already acknowledged she was "using" him / her. I do know better than to assume fact not in evidence. Sorry about that!

[jainen]

>>All 5 live in my client's house.<<

The two adults can claim the children in any combination they wish, except both at the same time. If they can't agree about the boy, he goes to the daughter because she is his parent under the foster child rule. If they can't agree about the twins, the claim goes to whoever has the higher AGI.

[Kea]

I should have also stated:

The qualifying child I want to use is one (or both) of the twins - who are my client's great granddaughters (who do not live with either Mom or Dad).

(The twins' Mom is ex-wife of client's grandson.)

@cathyan - yes, client's daughter was living with her when the little boy was placed with her. But I didn't see "foster child of dependent" as one of the options, regardless of timing. Could you tell me where you found that? Is it because the "foster child" gets kinda "redefined" as a natural child (as per Jainen's comment)?

[Terry D EA]

In my original post I stated that the husband claimed HOH with one child. The wife has the second child who the husband did not claim an exemption for. In my opinion, the wife should be able to claim HOH with her child as she is the parent and the child did live with her all year. Just need someone to back me up.

[cathyan]

Yes, Terry. If the child lived with her, she can claim HOH.

Kea, I wrote "Claiming a foster child of a descendant should work for HOH, IF the descendant was living in the household when the foster child was placed." as my opinion, and actually, in further reading (Kleinrock CCH 1040 Express Answers, p 1-9) the foster child would be a qualifying relative, not qualifying child.

[jainen]

>> foster child would be a qualifying relative, not qualifying child. <<

Please explain further what Kleinrock is saying. Under Section 152, an eligible foster child is EXACTLY the same as a natural child, at least as a tax dependent. That means the younger woman, who is the twins' grandmother, is his own mother (for tax purposes) and she can get the CTC for him if otherwise eligible, but not HoH because she doesn't pay for the housing. HoH goes to great-grandmother IF she claims any of the three, subject to tiebreaker rules if they can't agree.

I doubt that Kleinrock says the foster child can't be a qualifying child, but give us a quote and maybe we can decipher it.

[Kea]

Terry - I'm glad you got your answer.

I apologize for hijacking your thread. My intent was just to agree that sometimes the "basics" can get confusing. Then, in posting my comment, I realized I missed (or may have missed) a related issue.

Jainen - What I'm seeing in The TaxBook for Qualifying Child is:

The child must be the taxpayer's son, daughter, stepchild, FOSTER CHILD [my emphasis], brother, sister, stepbrother, stepsister or descendant of any of these, such as the taxpayer's grandchild, niece, or nephew.

So, I'm reading descendant of foster child is OK, but not foster child of descendant. I will be quite happy to find out I am mis-interpreting this. I would love to get her an extra $1000! (I like making those kind of errors!)

[jainen]

>>descendant of foster child is OK, but not foster child of descendant<<

If you believe that, then you also believe "descendant of son is OK, but not son of descendant." A foster child is EXACTLY the same as a natural child, included in the very same sentence of Section 152. You may not think this is logical, but it is another example of the social engineering that permeates our tax system. The government has a strong interest in protecting foster children, encouraging them to be handled through official channels with generous benefits to the foster parents.

[cathyan]

Jainen is right. The U.S. Master Tax Guide defines qualifying child as son, daughter, brother, sister and steps and decendants of such, and further says the relationship test includes foster and adopted children. So if we drop the words foster and step, all the children are treated the same.

[Kea]

Thanks for the clarification.

This will be one amendment I will enjoy!