Publication 501 - Exemptions, Standard Deduction, And Filing Information

You may find Table 5 helpful in figuring

loan. You provide $2,000 toward her total sup-

Generally, the amount of an item of support

whether you provided more than half of a

port. You cannot claim an exemption for your

is the amount of the expense incurred in provid-

person’s support.

daughter because you provide less than half of

ing that item. For lodging, the amount of support

her support.

is the fair rental value of the lodging.

Person’s own funds not used for support.

Expenses that are not directly related to any

Social security benefit payments. If a

A person’s own funds are not support unless

one member of a household, such as the cost of

husband and wife each receive payments that

they are actually spent for support.

food for the household, must be divided among

are paid by one check made out to both of them,

the members of the household.

Example. Your mother received $2,400 in

half of the total paid is considered to be for the

social security benefits and $300 in interest. She

support of each spouse, unless they can show

Example 1. Grace Brown, mother of Mary

paid $2,000 for lodging and $400 for recreation.

otherwise.

Miller, lives with Frank and Mary Miller and their

Even though your mother received a total of

If a child receives social security benefits and

two children. Grace gets a fully taxable pension

$2,700, she spent only $2,400 for her own sup-

uses them toward his or her own support, the

of $1,500, which she spends for clothing and

port. If you spent more than $2,400 for her sup-

payments are considered as provided by the

recreation. Grace has no other income. Frank

port and no other support was received, you

child.

and Mary’s total food expense for the household

have provided more than half of her support.

Support provided by the state (welfare,

is $5,000. They pay Grace’s medical and drug

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

Child’s wages used for own support. You

expenses of $300. The fair rental value of the

vided by the state to a needy person generally

cannot include in your contribution to your

lodging provided for Grace is $960 a year, based

are considered to be used for support. However,

child’s support any support that is paid for by the

on the cost of similar rooming facilities. Figure

payments based on the needs of the recipient

child with the child’s own wages, even if you paid

Grace’s total support as follows:

will not be considered as used entirely for that

the wages.

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

Fair rental value of lodging . . . . . . . . . . . .

$ 960

Year support is provided. The year you pro-

payments were not used for that purpose.

vide the support is the year you pay for it, even if

Clothing and recreation . . . . . . . . . . . . . .

1,500

you do so with borrowed money that you repay

Foster care payments and expenses. Pay-

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

300

in a later year.

ments you receive for the support of a foster

Share of food (1/5 of $5,000) . . . . . . . . . .

1,000

If you use a fiscal year to report your income,

child from a child placement agency are consid-

Total support . . . . . . . . . . . . . . . . . . . $3,760

you must provide more than half of the

ered support provided by the agency. Similarly,

dependent’s support for the calendar year in

payments you receive for the support of a foster

Because the support Frank and Mary pro-

which your fiscal year begins.

child from a state or county are considered sup-

vide ($960 lodging + $300 medical expenses +

port provided by the state or county.

$1,000 food = $2,260) is more than half of

Armed Forces dependency allotments. The

If you are not in the trade or business of

Grace’s $3,760 total support, and Grace meets

part of the allotment contributed by the govern-

providing foster care and your unreimbursed

the other dependency tests, they can claim an

ment and the part taken out of your military pay

out-of-pocket expenses in caring for a foster

exemption for her.

are both considered provided by you in figuring

child were mainly to benefit an organization

whether you provide more than half of the sup-

qualified to receive deductible charitable contri-

Example 2. Your parents live with you, your

port. If your allotment is used to support persons

butions, the expenses are deductible as charita-

spouse, and your two children in a house you

other than those you name, you can take the

ble contributions, but are not considered support

own. The fair rental value of your parents’ share

exemptions for them if they otherwise qualify.

you provided. For more information about the

of the lodging is $2,000 a year, which includes

deduction for charitable contributions, see Publi-

furnishings and utilities. Your father receives a

Example. You are in the Armed Forces.

cation 526. If your unreimbursed expenses are

nontaxable pension of $4,200, which he spends

You authorize an allotment for your widowed

not deductible as charitable contributions, they

equally between your mother and himself for

mother that she uses to support herself and your

are considered support you provided.

items of support such as clothing, transporta-

sister. If the allotment provides more than half of

If you are in the trade or business of provid-

tion, and recreation. Your total food expense for

their support, you can take an exemption for

ing foster care, your unreimbursed expenses

the household is $6,000. Your heat and utility

each of them, if they otherwise qualify, even

are not considered support provided by you.

bills amount to $1,200. Your mother has hospital

though you authorize the allotment only for your

and medical expenses of $600, which you pay

mother.

Example.

Lauren, a foster child, lived with

during the year. Figure your parents’ total sup-

Tax-exempt military quarters allowances.

Mr. and Mrs. Smith. The Smiths cared for

port as follows:

These allowances are treated the same way as

Lauren because they wanted to adopt her, not

dependency allotments in figuring support. The

as a trade or business or to benefit the agency

Support provided

Father Mother

allotment of pay and the tax-exempt basic allow-

that placed her in their home. The Smiths’ un-

ance for quarters are both considered as pro-

Fair rental value of lodging . . . . . . . $1,000 $1,000

reimbursed expenses are not deductible as

vided by you for support.

charitable contributions, but are considered sup-

Pension spent for their support . . . .

2,100 2,100

port they provided for Lauren.

Tax-exempt income. In figuring a person’s

Share of food (1/6 of $6,000) . . . . .

1,000 1,000

total support, include tax-exempt income, sav-

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

Medical expenses for mother . . . . .

600

ings, and borrowed amounts used to support

advance payment to a home for the aged to take

Parents’ total support . . . . . . . . . $4,100 $4,700

that person. Tax-exempt income includes cer-

care of your relative for life and the payment is

You must apply the support test separately

tain social security benefits, welfare benefits,

based on that person’s life expectancy, the

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

nontaxable life insurance proceeds, Armed

amount of support you provide each year is the

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

Forces family allotments, nontaxable pensions,

lump-sum payment divided by the relative’s life

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

and tax-exempt interest.

expectancy. The amount of support you provide

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

also includes any other amounts that you pro-

Example 1. You provide $4,000 toward

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

vided during the year.

your mother’s support during the year. She has

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

earned income of $600, nontaxable social se-

test for your mother, but not your father. Heat

curity benefit payments of $4,800, and tax-ex-

and utility costs are included in the fair rental

Total Support

empt interest of $200. She uses all these for her

value of the lodging, so these are not considered

To figure if you provided more than half of the

support. You cannot claim an exemption for your

separately.

support of a person, you must first determine the

mother because the $4,000 you provide is not

total support provided for that person. Total sup-

Lodging defined. Lodging is the fair rental

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

port includes amounts spent to provide food,

value of the room, apartment, or house in which

Example 2. Your daughter takes out a stu-

lodging, clothing, education, medical and dental

the person lives. It includes a reasonable allow-

dent loan of $2,500 and uses it to pay her col-

care, recreation, transportation, and similar ne-

ance for the use of furniture and appliances, and

lege tuition. She is personally responsible for the

cessities.

for heat and other utilities.

Page 13

Publication 501 - Exemptions, Standard Deduction, And Filing Information - 2001 Page 13

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