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Discussion Forum Index --> Advanced Tax Questions --> EIC FOR HOSTING EXCHANGE STUDENTS

Discussion Forum Index --> Tax Questions --> EIC FOR HOSTING EXCHANGE STUDENTS

DEMODN (talk|edits) said:

18 March 2014
My Client filed a sch c for 2012 showing the exchange student income. I had marked the box "not subject to self employment tax" on her 2012 sch c. She was married at the time and her husbands income provided the family support. She is now divorced (2013) and still hosting the exchange students. If I don't check the box, she qualifies for a large earned income credit. If I do check the box, she zeros out. In this situtation what would you do? The income is reported to her on 1099-misc box 7. TIA

Ckenefick (talk|edits) said:

18 March 2014
Was she exchanging something with the exchange students...and maybe that's why she's now divorced?

Nilodop (talk|edits) said:

18 March 2014
TIA = Transient Ischemic Attack, also known as a mini-stroke.

Gazoo (talk|edits) said:

18 March 2014
Did the hosting of the exchanage students (in the way of a young Viking-type testosterone machine or an unaffected African stud) in any way contribute to the divorce? If so, she should not be allowed to benefit through her own passions. It probably shoulden't be that way, but that's the way it is, and as Clouseau would to say: the lieu is the lieu. The lady must have clean hands in order to ask for a equitable reading of the law.

I see that M. Fick anticipated my post, however, I will leave mine be in the way of an exclamation point.

Nilodop (talk|edits) said:

18 March 2014
Does her "hobby" rise to the level of trade or business?

More seriously, can't it just go on Line 21 and not be SE income?

HowardS (talk|edits) said:

18 March 2014
No SE tax when married, SE tax when divorced just to qualify of EIC. Divorce has many advantages, but inconsistent treatment of income isn't one of them.

Ckenefick (talk|edits) said:

18 March 2014
What would one's expenses be in this situation: A ratable portion of the home's operating costs, food for the Ex Students, auto expenses?

I'm having a tough time wrapping my mind around it...wrapping around the idea that one can profit from such an endeavor, to Lenny's and Howard's point. It seems like it is nothing more than an expense reimbursement, a payment to defray costs, not a profit-intended, profit-making enterprise.

So, I wrote a haiku about it, in honor of Nat'l Poetry Month, which is coming up shortly:

Come to my home,

And you will see,

A copy of my 1040,

With a Schedule C,

A big loss it shows,

But perhaps it's not right,

For you are my hobby,

My little friend from France,

And while Husband is away,

What do you say we dance?

Thank you, thank you very much...

Trillium (talk|edits) said:

18 March 2014
Just tossing this out there: Discussion:Payments for hosting a foreign student.

Joan TB (talk|edits) said:

20 March 2014
This does seem like an unlikely place for some answers, but Publication 526 (Charitable Contributions) addresses various issues regarding foreign exchange students. One issue is that generally, these students are NOT your dependents. If your client doesn't have any other dependents, then EIC may be blown anyway.

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