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Discussion Forum Index --> Tax Questions --> Dependence Claim
SMB (talk|edits) said:
| 17 April 2007
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| Does anyone have experience with claiming, or not claiming adopted children when the parents receive an adoption subsidy. My understand is that you still must satisfy the "more than 50% support" issue. As an example, if you received $500/mo of adoption subsidy you would have to spend that $500 plus $501 (total 1001) more to claim the exemption. Of course, the gray area also comes into pay as you must state the fair market value of a person living in your home. Any suggestions on that figure or if I am incorrect in the above example of support? If the parent claims they are paying more than 1/2 of the child's support, can I take their word for it?
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Riley2 (talk|edits) said:
| 18 April 2007
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| If the child is under 19, there is no requirement that the taxpayer provide over one-half of the adopted child's support. The only support requirement is that the adopted child must not provide over one-half of his own support. A subsidy would not be treated as self-support. See Sec. 152(f)(1)(B), Sec. Sec. 152(c)(1), and Sec. 152(c)(2).
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SMB (talk|edits) said:
| 18 April 2007
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| THANKS SO MUCH FOR YOUR REPLY. I WAS BEGINNING TO THINK NO WANTED TO TOUCH THIS ONE. I AM A TAX PREPARER WHO DEALS WITH A NUMBER OF FOSTER, ADOPTIVE PARENTS. I, OF COURSE, WAS THE ONE THAT THE IRS CHALLENGED. THEY DENIED ALL MY CHILDREN, MADE ME PROVE ADOPTIONS BY ADOPTION RECORDS, SCHOOL RECORDS, SS, ETC. - I HAD TO MAIL STACKS OF STUFF. THEY TOLD ME I HAD TO PROVE THAT I PAID MORE THAN 1/2 OF THEIR SUPPORT AND STATED THAT ADOPTION SUBSIDY COUNTED AS THE CHILD'S SUPPORT. THIS WAS SEVERAL YEARS AGO AND I AM STILL STEAMING. THEY STILL DENIED DEPENDENCE CLAIM - WASN'T SATIFIED WITH MY FMV OF HOUSING. I WILL GATHER THIS INFORMATION AND I WILL BE READY TO FIGHT THIS FIGHT AGAIN.
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Riley2 (talk|edits) said:
| 18 April 2007
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| The rule that the IRS is citing applies to 2004 and prior years. The rule that I am citing applies to 2005 and after.
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SMB (talk|edits) said:
| 19 April 2007
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| Again, I thank you for this information. I have read a number of your responses to questions and this service is great. I see that you spend a lot of time answering these questions and just wanted to let you know how much it is appreciated. I only recently started using this and I will continue - there is a wealth of information here.
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