Tax/Loan question

[jmiller676]

Some professional advice is needed....

My fiance and I are planning on getting married this summer. However she is attending graduate school this fall. Here are my questions. Since her parents are paying for tuition and the lease of the apt. would be in their name can she still be claimed as a dependent. The problem is her brother goes to PU and her parents get more support with 2 dependents in college. The way I read it is her parents can claim her because she is under the age of 24 and meets the criteria for being claimed as a dependent. I also see that I will file my taxes seperately. I believe that once we file jointly we will be dependent on each other.

Can someone clear this up?

 

[iChokePeople]

Yes, she CAN be claimed. The decision on whether to actually do it is up to her and her parents.

 

[PAMom]

You will need to study Publication 501. If her parents claim her there are five tests they must meet 1) relationship - check, 2)age - check, 3)residency - NO check - she must have lived with them over half of the year minus school, 4)support - they must provide at least half of her support - see publication for what is considered and not considered support, 5)joint return test - see the rules for this in Pub. 501

This is an interesting situation and I can see the IRS going either way on it. The biggest factor is that only one party can claim the exemption - that is what they will look for on the returns, the SSN. I suspect that if you must file a return you would have to file as married filing separately if you do not claim her (otherwise you would be married filing jointly as a couple). The best case scenario here is to come to an agreement with her parents before hand, if possible.

Be prepared to have to explain yourself to the IRS if you file jointly and her parents claim her. The situation becomes stickier if she has income as well.

I am sure this has happened before. You also have the option to call the IRS and ask. I would bet though that you could get any number of different answers depending on who you talked to that particular day - happens frequently.

Hope this helps. Good Luck. Obviously, the ideal would be for you to file as a married couple which is how you are viewed by the IRS if you are married on the last day of the year.

Side note: Some confusion could be cleared up by how much income you bring to the equation. For clarification see the joint return test in Pub. 501.

Did I totally confuse you? Hope not!

 

[iChokePeople]

You will need to study Publication 501. If her parents claim her there are five tests they must meet 1) relationship - check, 2)age - check, 3)residency - NO check - she must have lived with them over half of the year minus school, 4)support - they must provide at least half of her support - see publication for what is considered and not considered support, 5)joint return test - see the rules for this in Pub. 501

Residency: She's a college student, and they're paying her tuition and lease -- I have exactly the same situation with one of my sons, and my accountant says 100%, absolutely, that qualifies and I can, if I choose, claim him. I'm not a tax accountant, but went through this discussion with one just last week.

Reference: Residency test: The child must live with you for more than half of the year. If the youth is away temporarily for special circumstances, such as for school, vacation, medical treatment, military service or detention in a juvenile facility, these particular absences still count as time lived at home. A child who was born or died during the year is considered to have lived with you for the entire year if your home was the child's home for the entire time he or she was alive during the year.

 

[PAMom]

Residency: She's a college student, and they're paying her tuition and lease -- I have exactly the same situation with one of my sons, and my accountant says 100%, absolutely, that qualifies and I can, if I choose, claim him. I'm not a tax accountant, but went through this discussion with one just last week.

Reference: Residency test: The child must live with you for more than half of the year. If the youth is away temporarily for special circumstances, such as for school, vacation, medical treatment, military service or detention in a juvenile facility, these particular absences still count as time lived at home. A child who was born or died during the year is considered to have lived with you for the entire year if your home was the child's home for the entire time he or she was alive during the year.

If you want to claim him go for it! I have no problem with that!

I do, however, believe you could get just as many different answers as the number of accountants that you asked. That is the nature of the tax code. Been there, done that!

I was simply referring to the fact that she is not actually residing with parents and is not temporarily absent. Again, as I stated it is best worked out with the parties involved.