Discussion:Dependents in Mexico

I'm new to this business, so please bear with me...I have a taxpayer who would like to declare several siblings who reside in Mexico as dependents. Two of siblings are under 18 and the other two are 19 and 20. He supports the entire family still left in Mexico, can the taxpayer declare them as dependents even though the individual are not living with him? I would appreciate a response.

Thank You....or as they say in old Mexico...Muchas Gracias.

(Pero me olvide del significado de siblings, half-brothers?? I'm too tired ,and I left my reference book at work. Technical problem : An ITIN number need to be obtained. Wait for more answers.

No se puede

-- Maybe . Lets see: Qualifying children include your children, siblings if a residence test and age or student test are also met. In addition, the residfent test. Tests: 1- Relatinship test:

Your children, stepchildren, and your siblings meet the relationship test

2- Residence test; NOPE- The children must have the the same residence as him for more than half of the year.

Age test(or student test) : Yes. Under age 19 or a ful time student under age 24 at the end of that year.

Then: One test is missing - or fail-- No a qualifying children NO SE PUEDE- No , Now What about a qualifyng dependent? It could be IFFFFF they are not a qualifyng children for somebody else. IOn my view: YES Taxpayer definition in my view apply just for residents in USA, not in Mexico. And, they are not making more than $ 3 , 200. (I guess Not . There are in Mexico. Conclusion: Maybe. It would be hard to do it . A SSN or an ITIN card need to be obtained.

Buy the Book J K Lasser's Your Income Tax 2006- I'm planning to get the professional edition for next tax season--if still alive. Pages 419 and 420 explain what I wrote. Have a great day, and a great headache.

Thank you for responding to inquiry....I will look into the reference material you have suggested. I'm using "The Tax Book" put out by Tax Materials, Inc" (a clone version of QuickFinder), but their explanation regarding my tax issue seem be a bit unclear.

I gather from the number of responses I received from my inquiry, not many of our seasoned collegues run into this type of issue very often.

Muchas Gracias

But according with the book, just a parent can claim a son that is not living with him...and a release from the mother will be needed... I'm guessing.. I never did something like that - Maybe other preparer want to add some ideas

Your client can claim all his siblings in Mexico as dependents. His siblings are be considered 'qualifying relatives' and need not live with him in order to be claimed as dependents.

As long as none of the siblings earn more than $3,200 a year, they are all eligible to be claimed as dependents on your client's return.

Greetings, Oaxacquita.

In order to claim the taxpayer's siblings as dependency exemptions, each of the four siblings must qualify as either a Qualifying Child or a Qualifying Relative. There are four tests to determine if one is a Qualifying Child of a taxpayer. All four of these tests must be met. These four tests are as follows:

    1 - Relationship Test - A brother or sister, or sibling, can qualify under this test.  TEST PASSED.
    2 - Residency Test - Each of the four siblings must have lived with the taxpayer for more than one-half of a year.  This test is not met
        because all four of the siblings apparently live in Mexico on a full-time basis.  TEST FAILED.

There is no need to apply the other two tests because the Residency Test failed, and all four tests must be satisfied.

THEREFORE, EACH OF THE FOUR SIBLINGS ARE NOT QUALIFYING CHILDREN of your taxpayer client. But, what about a Qualifying Relative? There are five tests that have to be met, and all five tests, to determine one as a Qualifying Relative. These five tests are as follows:

    1 - Relationship Test - This test was met through the Relationship Test to determine a Qualifying Child.  TEST PASSED
    2 - Support Test - The taxpayer must provide more than one-half of the support for each of the four siblings.  Based on your facts, 
        this test is met.  TEST PASSED.   

    3 - Gross Income Test - Each of the four siblings cannot earn more than $ 3,200.00 for 2005.  The number is $ 3,300.00 for 2006.
    4 - CITIZENSHIP TEST -  Each of the four siblings MUST BE EITHER A CITIZEN OR RESIDENT ALIEN OF THE UNITED STATES OF AMERICA.  Since each of
        the four siblings live in Mexico, it does not seem that they are resident aliens or citizens of The United States of America.  TEST FAILED. 

 There is no need to apply the fifth test because the Citizenship Test is not met, and all five tests must be met.  THEREFORE, EACH OF THE FOUR

SIBLINGS DO NOT QUALIFY AS QUALIFYING RELATIVES OF YOUR TAXPAYER CLIENT.

Since each of the four siblings of your taxpayer client do not qualify as either a Qualifying Child or as a Qualifying Relative, then your taxpayer client CANNOT CLAIM ANY OF THE FOUR SIBLINGS AS DEPENDENCY EXEMPTIONS on his individual income tax returns - federal and state (s).

Thank you.

Very Truly Yours,

Angelo Liberati CPA, CFE Managing Member Accurate Accountants, CPA'S, LLC

Numbers Done Right...The First Time

Business Address: 20 Ford Court, Meadow Glen, Monroe, New York State 10950 - 4946 Business Telephone Number: (845) 782 - 5228 Business Facsimile Number: (845) 782 - 5582 Business E - Mail Address: meadowglenatmonroe@frontiernet.net

911...4 years...7 months...22 days...Always Remember...Never Forget

Thank you.

"U s citizen ,OR A RESIDENT OF THE USA, CANADA OR MEXICO, Riley and CPA are giving us the answer- Still I recognize that it would be hard to get the ITIN numbers. By the way, please, What the hell is siblings: The dictionary is giving me two definitions.

- Tim Doyle, TaxAlmanac Moderator 16:27, 3 May 2006 (CDT)

From IRS pub 501

Relatives who do not have to live with you.

A person related to you in any of the following ways does not have to live with you all year as a member of your household to meet this test.

Your child, stepchild, eligible foster child, or a descendant of any of them (for example, your grandchild). (A legally adopted child is considered your child.)

Your brother, sister, half brother, half sister, stepbrother, or stepsister.

Your father, mother, grandparent, or other direct ancestor, but not foster parent.

Your stepfather or stepmother.

A son or daughter of your brother or sister.

A brother or sister of your father or mother.

Your son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law.

Any of these relationships that were established by marriage are not ended by death or divorce.

I want thank everyone for taking the time to responding to my inquiry...These lively discussions are what make tax so much more interesting.

OAXACQUITA

Happy Cinco De Maya!!

Greetings to all.

Once again, in order for the four siblings in Mexico to pass the Citizenship Test, then each of the four siblings must either be a citizen of The United States of America or a resident alien of The United States of America. Potential qualifying relatives can be residents of countries that are contiguous to The United States of America, such as Canada and Mexico. However, if they are living in Mexico or Canada, they must be a US citizen. If they are living in Mexico, or Canada, and are Mexican citizens, or Canadian citizens, and not US citizens, then the Citizenship Test is not met.

For clarification, the individuals mentioned by HPTax, that don't have to live with the taxpayer claiming a dependency exemption, is for the determination of a Qualifying Relative only, and not for the determination of a Qualifying Child.

Thank you.

Very Truly Yours,

Angelo Liberati CPA, CFE Managing Member Accurate Accountants, CPA'S, LLC

Numbers Done Right...The First Time

Business Address: 20 Ford Court, Meadow Glen, Monroe, New York State 10950 - 4946

Business Telephone Number: (845) 782 - 5228

Business Facsimile Number: (845) 782 - 5582

Business E - Mail Address: meadowglenatmonroe@frontiernet.net

911...4 years...7 months...24 days...Always Remember...Never Forget

I'm reading and reading Lasser's Income Tax- I don't find in any place that rule that if living in Canada or Mexico need to be USA citizens . It looks that you are sure about that. May I get any reference? IRS code ?

P.S. It's Mayo...

Did anyone watch Oscar de La Hoja vs Majorga- Oscar was great!!! And He it is a gentleman...