Publication 501 - Exemptions, Standard Deduction, And Filing Information

Armed Forces dependency allotments. The

If you are not in the trade or business of

Share of food (1/5 of $5,200) . . . . .

1,040

part of the allotment contributed by the govern-

providing foster care and your unreimbursed

Total support . . . . . . . . . . . . . . .

$6,440

ment and the part taken out of your military pay

out-of-pocket expenses in caring for a foster

are both considered provided by you in figuring

child were mainly to benefit an organization

The support Frank and Mary provide ($1,800

whether you provide more than half of the sup-

qualified to receive deductible charitable contri-

lodging + $1,200 medical expenses + $1,040

port. If your allotment is used to support persons

butions, the expenses are deductible as charita-

food = $4,040) is more than half of Grace’s

other than those you name, you can take the

ble contributions but are not considered support

$6,440 total support.

exemptions for them if they otherwise qualify.

you provided. For more information about the

deduction for charitable contributions, see Publi-

Example 2. Your parents live with you, your

Example. You are in the Armed Forces.

cation 526. If your unreimbursed expenses are

spouse, and your two children in a house you

You authorize an allotment for your widowed

not deductible as charitable contributions, they

own. The fair rental value of your parents’ share

mother that she uses to support herself and her

are considered support you provided.

of the lodging is $2,000 a year ($1,000 each),

sister. If the allotment provides more than half of

If you are in the trade or business of provid-

which includes furnishings and utilities. Your fa-

each person’s support, you can take an exemp-

ing foster care, your unreimbursed expenses

ther receives a nontaxable pension of $4,200,

tion for each of them, if they otherwise qualify,

are not considered support provided by you.

which he spends equally between your mother

even though you authorize the allotment only for

and himself for items of support such as cloth-

your mother.

Example.

Lauren, a foster child, lived with

ing, transportation, and recreation. Your total

Mr. and Mrs. Smith for the last 3 months of the

Tax-exempt military quarters allowances.

food expense for the household is $6,000. Your

year. The Smiths cared for Lauren because they

These allowances are treated the same way as

heat and utility bills amount to $1,200. Your

wanted to adopt her (although she had not been

dependency allotments in figuring support. The

mother has hospital and medical expenses of

placed with them for adoption). They did not

allotment of pay and the tax-exempt basic allow-

$600, which you pay during the year. Figure

care for her as a trade or business or to benefit

ance for quarters are both considered as pro-

your parents’ total support as follows:

the agency that placed her in their home. The

vided by you for support.

Smiths’ unreimbursed expenses are not deduct-

Support provided

Father

Mother

ible as charitable contributions but are consid-

Tax-exempt income. In figuring a person’s

ered support they provided for Lauren.

total support, include tax-exempt income, sav-

Fair rental value of lodging

$1,000

ings, and borrowed amounts used to support

Pension spent for their

Home for the aged. If you make a lump-sum

that person. Tax-exempt income includes cer-

support . . . . . . . . . . . . .

2,100

advance payment to a home for the aged to take

tain social security benefits, welfare benefits,

Share of food (1/6 of

care of your relative for life and the payment is

nontaxable life insurance proceeds, Armed

$6,000) . . . . . . . . . . . . .

1,000

based on that person’s life expectancy, the

Forces family allotments, nontaxable pensions,

amount of support you provide each year is the

and tax-exempt interest.

Medical expenses for

lump-sum payment divided by the relative’s life

mother . . . . . . . . . . . . . .

600

Example 1. You provide $4,000 toward

expectancy. The amount of support you provide

Parents’ total support . . .

$4,100

$4,700

your mother’s support during the year. She has

also includes any other amounts you provided

earned income of $600, nontaxable social se-

during the year.

You must apply the support test separately

curity benefits of $4,800, and tax-exempt inter-

to each parent. You provide $2,000 ($1,000

est of $200. She uses all these for her support.

lodging, $1,000 food) of your father’s total sup-

Total Support

You cannot claim an exemption for your mother

port of $4,100 — less than half. You provide

because the $4,000 you provide is not more

$2,600 to your mother ($1,000 lodging, $1,000

To figure if you provided more than half of a

than half of her total support of $9,600.

food, $600 medical) — more than half of her

person’s support, you must first determine the

total support of $4,700. You meet the support

total support provided for that person. Total sup-

Example 2. Your brother’s daughter takes

test for your mother, but not your father. Heat

port includes amounts spent to provide food,

out a student loan of $2,500 and uses it to pay

and utility costs are included in the fair rental

lodging, clothing, education, medical and dental

her college tuition. She is personally responsible

value of the lodging, so these are not considered

care, recreation, transportation, and similar ne-

for the loan. You provide $2,000 toward her total

separately.

cessities.

support. You cannot claim an exemption for her

because you provide less than half of her sup-

Generally, the amount of an item of support

Lodging. If you provide a person with lodging,

port.

is the amount of the expense incurred in provid-

you are considered to provide support equal to

ing that item. For lodging, the amount of support

Social security benefits. If a husband and

the fair rental value of the room, apartment,

is the fair rental value of the lodging.

wife each receive benefits that are paid by one

house, or other shelter in which the person lives.

Expenses that are not directly related to any

check made out to both of them, half of the total

Fair rental value includes a reasonable allow-

one member of a household, such as the cost of

paid is considered to be for the support of each

ance for the use of furniture and appliances, and

food for the household, must be divided among

spouse, unless they can show otherwise.

for heat and other utilities that are provided.

the members of the household.

If a child receives social security benefits and

Fair rental value defined. This is the

uses them toward his or her own support, the

Example 1. Grace Brown, mother of Mary

amount you could reasonably expect to receive

benefits are considered as provided by the child.

from a stranger for the same kind of lodging. It is

Miller, lives with Frank and Mary Miller and their

Support provided by the state (welfare,

used instead of actual expenses such as taxes,

two children. Grace gets social security benefits

food stamps, housing, etc.). Benefits pro-

of $2,400, which she spends for clothing, trans-

interest, depreciation, paint, insurance, utilities,

vided by the state to a needy person generally

portation, and recreation. Grace has no other

cost of furniture and appliances, etc. In some

are considered support provided by the state.

income. Frank and Mary’s total food expense for

cases, fair rental value may be equal to the rent

However, payments based on the needs of the

the household is $5,200. They pay Grace’s

paid.

recipient will not be considered as used entirely

medical and drug expenses of $1,200. The fair

If you provide the total lodging, the amount of

for that person’s support if it is shown that part of

rental value of the lodging provided for Grace is

support you provide is the fair rental value of the

the payments were not used for that purpose.

$1,800 a year, based on the cost of similar

room the person uses, or a share of the fair

rooming facilities. Figure Grace’s total support

rental value of the entire dwelling if the person

as follows:

Foster care payments and expenses. Pay-

has use of your entire home. If you do not pro-

ments you receive for the support of a foster

vide the total lodging, the total fair rental value

child from a child placement agency are consid-

must be divided depending on how much of the

Fair rental value of lodging . . . . . .

$ 1,800

ered support provided by the agency. Similarly,

total lodging you provide. If you provide only a

Clothing, transportation, and

payments you receive for the support of a foster

part and the person supplies the rest, the fair

recreation . . . . . . . . . . . . . . . . . .

2,400

child from a state or county are considered sup-

rental value must be divided between both of

port provided by the state or county.

Medical expenses . . . . . . . . . . . .

1,200

you according to the amount each provides.

Page 18

Publication 501 (2009)

Publication 501 - Exemptions, Standard Deduction, And Filing Information - 2009 Page 18

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