Ch 4 - Questions (Dependent-Related Filing Statuses) Flashcards
How is the Custodial Parent determined
By the number of nights a child lived with them, the most nights is the custodial parent.
What form is used for the Multiple Support Agreement
Form 2120
What return would a nonresident alien file?
1040NR
What is form 2120 used for
Multiple Support Agreement
What is form 1040NR used for
Nonresident aliens
If a son goes off to college, does his principal place of abode change?
Generally, no. This would be considered a temporary absence.
What criteria is used to determine if a principal place of abode has changed due to a person’s absence?
If his living area is maintained and he can be reasonably expected to return home after a temporary absence, it would not be changed.
What do filing statuses HoH and QW require that S, MFJ and MFS don’t
A dependent.
What are the requirements to file as HoH?
Unmarried on the last day of the tax year. Paid more than half the cost of maintaining the household for the year. Maintained a household for EITHER a QC or QR who lived with the taxpayer for more than half the year and can be claimed as an exemption. OR a parent who the taxpayer must have paid more than half the cost of maintaining the parent’s main home for the entire year and must claim as an exemption on their return.
What is included in the cost of maintaining a household
Rent, mortgage interest, real estate taxes, homeowner’s or renter’s insurance, repairs/maintenance, utilities, food eaten in the home.
What are not included in the cost of maintaining a household
Clothing, Education, Medical treatment, Vacations, Life insurance, Transportation, Rental value of a home owned by a taxpayer, Services provided by the taxpayer or other members of the household.
Is the fair rental value of a home owned by a taxpayer included in the cost of maintaining a home?
No
What worksheet is used to determine whether the taxpayer has paid more than half the cost of maintaining the household for the year
Worksheet 2-1, Cost of Keeping up a home.
Is rent included in the cost of maintaining a household?
Yes
Is clothing included in the cost of maintaining a household?
No
Is mortgage interest included in the cost of maintaining a household?
Yes
Are education costs included in the cost of maintaining a household?
No
Are real estate taxes included in the cost of maintaining a household?
Yes
Is medical treatment included in the cost of maintaining a household?
No
Are home repairs and maintenance included in the cost of maintaining a household?
Yes
Are vacations included in the cost of maintaining a household?
No
Are utilities included in the cost of maintaining a household?
Yes
Is transportation included in the cost of maintaining a household?
No
Is food eaten at home included in the cost of maintaining a household?
Yes
What is provided by BlockWorks to use in determining household costs?
Household Support Worksheet
Can a QC of a taxpayer be married and taxpayer still claim an exemption?
No, unless the taxpayer can claim an exemption for that child.
Can an unrelated dependent qualify the taxpayer for HoH status?
No, the dependent must actually be related to the taxpayer.
Can a taxpayer with a dependent and a multiple support agreement file as HoH?
No. Must have provided over half the support by themselves.
Can a nonresident alien file as HoH
No. Nonresident aliens cannot file as HoH.
Can a married person be considered unmarried for tax purposes?
Yes. A person must be legally separated under a decree of divorce or separate maintenance and meet other requirements.
A legally separated person must meet four requirements to be considered unmarried for tax purposes.
The person must file a separate return from their spouse.
The person must have provided more than half the cost of maintaining their home for the tax year.
The home must have been a principal place of abode of the taxpayer and their dependent son, daughter or eligible foster child (QC or QR) for more than half the tax year. This includes a child who would be a dependent except that the exemption was awarded to the noncustodial spouse by a. A post-1984 divorce or separation agreement OR b. A waiver by the custodial parent.
The person’s spouse must not have lived in the home at any time during the last six months of the tax year.
What form is used to waive an exemption of a child?
Form 8332 Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent.
What are the disadvantages of MFS?
The standard deduction is $0 if the other spouse itemizes.
The effective tax rates are higher.
Many deductions and credits are disallowed completely or phased out at lower income levels.
What are requirements to file as QW?
Spouse died in either of the two tax years immediately preceding the current tax year.
The taxpayer was entitled to file a joint return with their spouse for the year the spouse died (whether or not they actually filed a joint return)
The taxpayer did not remarry before the end of the tax year in which the spouse died and remained unmarried through the end of the tax year for which the taxpayer seeks to use QW status.
The taxpayer has a child, stepchild, or adopted child (but not a foster child) they can claim as an exemption or could claim as a dependent)
The child lived in the taxpayer’s home for the entire year
The taxpayer paid over half the cost of maintaining their household, which is the main home for the taxpayer and their dependent child.
For how many years can a person file QW if they qualify
For 2 years following the year of death of the spouse
If a spouse dies, does the other spouse qualify for QW for the year they died?
No, they should file married the year they died. Then they may qualify to file QW for 2 years.
Who generally claims the dependent exemption for a child if the parents are divorce or separated
Generally the custodial parent.
How is custodial parent determined
The parent with whom the child spent the most nights of the year.
How is living with a parent for a night determined?
Sleeps at that parent’s home, whether or not parent is present. Is in company of parent when not sleeping at a parent’s home (e.g. vacation).
How are temporary absences treated in case of divorced or separated parents?
Any time the child spends with either parent is not treated as a temporary absence from the other parent.
When do the rules for divorced or separated parents apply?
If all conditions are met:
One or both of the parents provided more than half the child’s total support.
At the end of the year, the parents of the child are Divorced or legally separated, separated under a written separation agreement, OR lived apart for the last six months of the year, regardless of whether they were ever married.
The child lived with one or both parents for more than half the year.
What three facts must a divorce decree (or separate maintenance) or written separation agreement (after 1984 and prior to 2009) state?
The noncustodial parent can claim the child as a dependent without regard to any conditions, such as payment of support.
The custodial parent will not claim the child as a dependent for the year.
The years for which the noncustodial, instead of custodial parent, can claim the child as a dependent.
How do divorce decrees or court documents issued in 2009 and later treat child’s exemption?
They do not serve to release the child’s exemption to a noncustodial parent. Instead Form 8332 must be used.
What form is used to release a child’s exemption from a noncustodial parent?
Form 8332
When should you secure a form 8332?
Whenever a custodial parent would be sharing benefits with a noncustodial parent.
When can a noncustodial parent claim the CTC?
If they are allowed to take the exemption dependency for that child.
Do step relationships (step child, etc) terminate at divorce?
No
What are tiebreaker rules?
Used to determine which taxpayer can claim the QC.
What are the 4 tiebreaker rules
- If only one of the taxpayers is the child’s parent, the child is the QC of the parent.
- If parents do not file a joint return but both claim the child, the IRS goes by the greater number of nights. If that ties, then goes by highest AGI.
- If neither parent can claim the QC, the child is the QC of the person with the highest AGI
- If a parent can claim the child but does not, the child is treated as the QC of the person who has the highest AGI but only if that person’s AGI is greater than the AGI of either of the child’s parents who could have claimed the child. If the parents file jointly, divide the AGI between the two.
Can a noncustodial parent claim all 6 benefits for a child?
No, they can only claim three of the benefits.
Which benefits of a child can a noncustodial parent claim?
ExempTion, Child Tax Credit, Additional Child Tax Credit.
Which benefits of a child can a noncustodial parent NOT claim?
HoH, Daycare/childcare, EITC
