Publication 501 - Exemptions, Standard Deduction, And Filing Information

Example. Your parents live rent free in a

total support, so he is not your qualifying rela-

claim an exemption for that person as a qualify-

house you own. It has a fair rental value of

tive. You cannot claim an exemption for your

ing relative. Each of the others must sign a

$5,400 a year furnished, which includes a fair

son.

statement agreeing not to claim the exemption

rental value of $3,600 for the house and $1,800

for that year. The person who claims the exemp-

Medical insurance premiums. Medical insur-

for the furniture. This does not include heat and

tion must keep these signed statements for his

ance premiums you pay, including premiums for

utilities. The house is completely furnished with

or her records. A multiple support declaration

supplementary Medicare coverage, are in-

furniture belonging to your parents. You pay

identifying each of the others who agreed not to

cluded in the support you provide.

$600 for their utility bills. Utilities are not usually

claim the exemption must be attached to the

included in rent for houses in the area where

return of the person claiming the exemption.

Medical insurance benefits. Medical in-

your parents live. Therefore, you consider the

Form 2120, Multiple Support Declaration, can

surance benefits, including basic and supple-

total fair rental value of the lodging to be $6,000

mentary Medicare benefits, are not part of

be used for this purpose.

($3,600 fair rental value of the unfurnished

support.

You can claim an exemption under a multiple

house, $1,800 allowance for the furnishings pro-

support agreement for someone related to you

Tuition payments and allowances under the

vided by your parents, and $600 cost of utilities)

or for someone who lived with you all year as a

GI Bill. Amounts veterans receive under the

of which you are considered to provide $4,200

member of your household.

GI Bill for tuition payments and allowances while

($3,600 + $600).

they attend school are included in total support.

Example 1. You, your sister, and your two

Person living in his or her own home. The

brothers provide the entire support of your

Example. During the year, your son re-

total fair rental value of a person’s home that he

mother for the year. You provide 45%, your

or she owns is considered support contributed

ceives $2,200 from the government under the GI

sister 35%, and your two brothers each provide

by that person.

Bill. He uses this amount for his education. You

10%. Either you or your sister can claim an

provide the rest of his support — $2,000. Be-

Living with someone rent free. If you live

exemption for your mother. The other must sign

cause GI benefits are included in total support,

with a person rent free in his or her home, you

a statement agreeing not to take an exemption

your son’s total support is $4,200 ($2,200 +

must reduce the amount you provide for support

for your mother. The one who claims the exemp-

$2,000). You have not provided more than half

of that person by the fair rental value of lodging

tion must attach Form 2120, or a similar declara-

of his support.

he or she provides you.

tion, to his or her return and must keep the

Child care expenses. If you pay someone to

statement signed by the other for his or her

Property. Property provided as support is

provide child or dependent care, you can include

records. Because neither brother provides more

these payments in the amount you provided for

measured by its fair market value. Fair market

than 10% of the support, neither can take the

the support of your child or disabled dependent,

value is the price that property would sell for on

exemption and neither has to sign a statement.

even if you claim a credit for the payments. For

the open market. It is the price that would be

information on the credit, see Publication 503,

Example 2. You and your brother each pro-

agreed upon between a willing buyer and a

Child and Dependent Care Expenses.

vide 20% of your mother’s support for the year.

willing seller, with neither being required to act,

The remaining 60% of her support is provided

and both having reasonable knowledge of the

Other support items. Other items may be

equally by two persons who are not related to

relevant facts.

considered as support depending on the facts in

her. She does not live with them. Because more

Capital expenses. Capital items, such as

each case.

than half of her support is provided by persons

furniture, appliances, and cars, that are bought

who cannot claim an exemption for her, no one

for a person during the year can be included in

can take the exemption.

Do Not Include in Total Support

total support under certain circumstances.

The following examples show when a capital

Example 3. Your father lives with you and

The following items are not included in total

item is or is not support.

receives 25% of his support from social security,

support.

40% from you, 24% from his brother (your un-

Example 1. You buy a $200 power lawn

1. Federal, state, and local income taxes paid

cle), and 11% from a friend. Either you or your

mower for your 13-year-old child. The child is

by persons from their own income.

uncle can take the exemption for your father if

given the duty of keeping the lawn trimmed.

the other signs a statement agreeing not to. The

2. Social security and Medicare taxes paid by

Because the lawn mower benefits all members

one who takes the exemption must attach Form

persons from their own income.

of the household, you cannot include the cost of

2120, or a similar declaration, to his return and

the lawn mower in the support of your child.

3. Life insurance premiums.

must keep for his records the signed statement

from the one agreeing not to take the exemption.

4. Funeral expenses.

Example 2. You buy a $150 television set

as a birthday present for your 12-year-old child.

5. Scholarships received by your child if your

The television set is placed in your child’s bed-

Support Test for Children of

child is a full-time student.

room. You can include the cost of the television

Divorced or Separated Parents or

6. Survivors’ and Dependents’ Educational

set in the support of your child.

Parents Who Live Apart

Assistance payments used for the support

of the child who receives them.

Example 3. You pay $5,000 for a car and

In most cases, a child of divorced or separated

parents or parents who live apart will be a quali-

Government or charitable assistance you re-

17-year-old daughter use the car equally. Be-

fying child of one of the parents. See

Children of

ceived because of your temporary relocation

cause you own the car and do not give it to your

divorced or separated parents or parents who

due to the storms, tornadoes, or flooding in a

daughter but merely let her use it, you cannot

live apart

under Qualifying Child, earlier. How-

Midwestern disaster area is not included in total

include the cost of the car in your daughter’s

ever, if the child does not meet the requirements

support. Disregard these amounts in determin-

total support. However, you can include in your

to be a qualifying child of either parent, the child

ing who provided a person’s support.

daughter’s support your out-of-pocket expenses

may be a qualifying relative of one of the par-

of operating the car for her benefit.

ents. In that case, the following rules must be

Multiple Support Agreement

used in applying the support test.

Example 4. Your 17-year-old son, using

A child will be treated as being the qualifying

personal funds, buys a car for $4,500. You pro-

Sometimes no one provides more than half of

relative of his or her noncustodial parent if all

vide all the rest of your son’s support — $4,000.

the support of a person. Instead, two or more

four of the following statements are true.

Since the car is bought and owned by your son,

persons, each of whom would be able to take

the car’s fair market value ($4,500) must be

the exemption but for the support test, together

1. The parents:

included in his support. Your son has provided

provide more than half of the person’s support.

more than half of his own total support of $8,500

When this happens, you can agree that any

a. Are divorced or legally separated under

($4,500 + $4,000), so he is not your qualifying

one of you who individually provides more than

a decree of divorce or separate mainte-

child. You did not provide more than half of his

10% of the person’s support, but only one, can

nance,

Publication 501 (2009)

Page 19

Publication 501 - Exemptions, Standard Deduction, And Filing Information - 2009 Page 19

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