Useful Flowcharts for Dependancy rules

[kcjenkins]

Here is a flowchart on claiming an individual as a dependent under Code § 152. The flowchart is available at

http://www.tax-charts.com/charts/152_dependent_print.pdf

A printable version of the same chart is available at

http://www.tax-charts.com/charts/152_dependent_print.pdf

The flowchart includes the 2009 changes to the definition of dependent.

[jainen]

>>includes the 2009 changes<<

I confess I find flow charts like this too cumbersome to be useful, so that personal preference probably colors my opinion. But it does not look to me as if this flowchart has been updated with the most recent information. For example, it still defines custodial parent as "the parent having custody for the greater portion of the calendar year." Custody is generally ordered by Family Court, which is irrelevant in terms of a tax dependent. Even considering "physical custody," the test is no longer the greater portion of the year, but the number of nights.

[RoyDaleOne]

I love flowcharts, just works with my brain, what little there is.

[Lion EA]

I do, too; but NINE pages?! Don't have the wall space to post that.

[jainen]

>>I love flowcharts<<

Other than the format, do you have any comment on its accuracy?

Here's another example, the story of Monica and Doris. The author states that "If [mother] Monica does not claim Doris as a qualifying child and [aunt] Sissy or [uncle] Brad have higher adjusted gross incomes than Monica, then whichever of the two has the highest adjusted gross income can claim Doris as a qualifying child." In my opinion, this is wrong--EITHER Sissy or Brad could claim Doris as a qualifying child. AGI would only be a factor if they BOTH claimed her, but in any case it wouldn't have to be more than Monica's AGI.

[Lion EA]

Quoting NATP speaker Sue Voth, EA, from her handouts:

If the parents may claim an individual as a qualifying child, but neither parent actually claims the child, another taxpayer may claim the individual as a qualifying child. However, this other taxpayer must otherwise be eligible to claim the child as a qualifying child and have a higher AGI for the tax year than any parent eligible to claim the child.

I think that was to close the loophole that allowed a working sibling or live-in grandparent to claim a child when parents were too high income to gain much by the dependency exemption.

[jainen]

>>that was to close the loophole that allowed a working sibling or live-in grandparent to claim a child when parents were too high income<<

That is correct; I was wrong on the point. On the other point too--starting in 2009, the tiebreaker rules are not optional. They used to only apply if more than one taxpayer actually claimed the child. Now it's if more than one taxpayer CAN claim the child.

Of course, now I like the chart even less!

[kcjenkins]

Several corrections have been made to the chart. The same links will still take you to the corrected chart. I think Jainen is right about the tie-breaker rules, and have notified Andrew about that.

The change we are referring to is that IRC 152(c )(4)(A) used to read "Except as provided in subparagraph (, if (but for this paragraph) an individual may be and is claimed as a qualifying child by 2 or more taxpayers . . ."

It now reads Except as provided in subparagraphs ( and (C ), if (but for this paragraph) an individual may be claimed as a qualifying child by 2 or more taxpayers . . .

The "AND IS" has been deleted. This is a significant change in some situations.

[Catherine]

Several corrections have been made to the chart. The same links will still take you to the corrected chart. I think Jainen is right about the tie-breaker rules, and have notified Andrew about that.

Twelve pages (but nice colors!).

I am reminded of bits from the MacNelly tax cartoon I've posted here before:

Requested by the Department of Agriculture: How many talking chickens do you own? Names? Do any of them play the oboe?

and

Number of Parakeets subtracted from Gross Rotated Income (Plus Line 27 - unless greater than 12 miles)

They forgot to address the issue of claiming pets as dependents, and the differing treatments of cats, dogs, and tree frogs. Yikes.