When A Child Is Treated As A Dependent of Both Parents: Divorced

Posted by Alan on August 18, 2008, 4:03 pm

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The IRS has released RP 2008-48 that describes the circumstances
under which the Internal Revenue Service will treat a child of
parents who are divorced, separated, or living apart as the
dependent of both parents for purposes of §§ 105(b),
106(a),132(h)(2)(B), 213(d)(5), 220(d)(2) and 223(d)(2) of the
Internal Revenue Code when the custodial parent has not released
the claim to the exemption for the child under § 152(e)(2).

Sec. 105(b) relates to excluding from gross income employer
provided medical reimbursements.
Sec. 106(a) relates to excluding from gross income employer
provided health insurance.
Sec. 132(h)(2)(B) relates to excluding from gross income certain
employer fringe benefits.
Sec. 213(d)(5) relates to certain deductions for medical expenses.
Sec. 220(d)(2) & 223(d)(2) relates to excluding from gross income
distributions from MSAs & HSAs used for medical expenses.

http://www.irs.gov/pub/irs-drop/rp-08-48.pdf

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Posted by Arthur Kamlet on August 18, 2008, 4:37 pm

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>The IRS has released RP 2008-48 that describes the circumstances

>under which the Internal Revenue Service will treat a child of

>parents who are divorced, separated, or living apart as the

>dependent of both parents for purposes of §§ 105(b),

>106(a),132(h)(2)(B), 213(d)(5), 220(d)(2) and 223(d)(2) of the

>Internal Revenue Code when the custodial parent has not released

>the claim to the exemption for the child under § 152(e)(2).

>Sec. 105(b) relates to excluding from gross income employer

>provided medical reimbursements.

>Sec. 106(a) relates to excluding from gross income employer

>provided health insurance.

>Sec. 132(h)(2)(B) relates to excluding from gross income certain

>employer fringe benefits.

>Sec. 213(d)(5) relates to certain deductions for medical expenses.

>Sec. 220(d)(2) & 223(d)(2) relates to excluding from gross income

>distributions from MSAs & HSAs used for medical expenses.

> http://www.irs.gov/pub/irs-drop/rp-08-48.pdf

If I read this right, this brings the ruls for who is a medical
dependent in line with the newer qualified child rules.

The former rules did allow either parent to pay medical expenses
and contribute to certain medical plans covering their child,
whether or not the child was claimed as a dependent, and this
is consistent with that.

For dependency allowance, however, only the custodial parent
can claim unless that right was signed away. And for HoH or EIC
only the custodial parent can claim and if there is just
one custodial parent, HoH/EIC are not assignable.

And notice the IRS is in-your-face insisting a new divorce decree
cannot be used to release the dependency exemption. Period.
--

ArtKamlet at a o l dot c o m Columbus OH K2PZH

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Posted by Alan on August 18, 2008, 7:35 pm

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Arthur Kamlet wrote:

>> The IRS has released RP 2008-48 that describes the circumstances

>> under which the Internal Revenue Service will treat a child of

>> parents who are divorced, separated, or living apart as the

>> dependent of both parents for purposes of §§ 105(b),

>> 106(a),132(h)(2)(B), 213(d)(5), 220(d)(2) and 223(d)(2) of the

>> Internal Revenue Code when the custodial parent has not released

>> the claim to the exemption for the child under § 152(e)(2).

>> Sec. 105(b) relates to excluding from gross income employer

>> provided medical reimbursements.

>> Sec. 106(a) relates to excluding from gross income employer

>> provided health insurance.

>> Sec. 132(h)(2)(B) relates to excluding from gross income certain

>> employer fringe benefits.

>> Sec. 213(d)(5) relates to certain deductions for medical expenses.

>> Sec. 220(d)(2) & 223(d)(2) relates to excluding from gross income

>> distributions from MSAs & HSAs used for medical expenses.

>> http://www.irs.gov/pub/irs-drop/rp-08-48.pdf

> [snip]

> And notice the IRS is in-your-face insisting a new divorce decree

> cannot be used to release the dependency exemption. Period.

This was written into the final regs published in July 2008 (see
below). IRC Sec. 152(e) gives the Secretary the authority to
specify the manner or form of the release.

(ii) Form designated by IRS. A written declaration may be made on
Form 8332, Release/Revocation of Release of Claim to Exemption
for Child by Custodial Parent, or successor form designated by
the IRS. A written declaration not on the form designated by the
IRS must conform to the substance of that form and must be a
document executed for the sole purpose of serving as a written
declaration under this section. A court order or decree or a
separation agreement may not serve as a written declaration.

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<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
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When A Child Is Treated As A Dependent of Both Parents: Divorced - Separated or Living Apart