Can my father be my dependent for tax purposes?

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My 93yo dad lives with me and I'm wondering if I can claim him as a dependent or get some other kind of benefit for 2016 taxes.  He does make about 100K a year from dividends, SS, pension, and CD interest. An accountant does his taxes.  I'm assuming since he files a tax return that I could not list him as a dependent?

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Theoretically, I don't know, sorry - but because of the income threshold I've never seen the issue of the qualifying rel... (more)

marginoferror (Feb. 02, 2017 @ 4:06p) |

Thanks, was interesting to think about.

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kriskos4 (Feb. 02, 2017 @ 4:21p) |

Due to his income, you can't claim him even if he didn't claim himself.  If his taxable income were less than $4,050, th... (more)

caterpillar123 (Feb. 02, 2017 @ 5:50p) |

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you generally have to provide more than half of the support of someone to claim them as a dependent. search on IRS.gov for specific rules.

You would need to provide over half of his support.
With 100K in income, it is hard to imagine that happening.

No.

From Forbes: I believe the current limit it $4K.

"Your parent’s gross income in 2012 must have been less than $3,800. To determine that figure, exclude his or her Social Security benefits (except for any portion that was taxable), but include all pensions, dividends, interest, rental income and wages,"

As other pointed out, you need to provide over half of the support and it's only beneficial if your dad have almost no income to speak of because he will lose his own deduction.

So, it would serve no purpose to claim him, AFAIK, even if you could.

Unless you make a lot of money he may get a better tax break by claiming you as his dependent. At 93 what does he need $100k/yr for? He should be supporting you and passing it your way.....😉

kriskos4 said:   My 93yo dad lives with me and I'm wondering if I can claim him as a dependent or get some other kind of benefit for 2016 taxes.  He does make about 100K a year from dividends, SS, pension, and CD interest. An accountant does his taxes.  I'm assuming since he files a tax return that I could not list him as a dependent?
  Your 93-year old dad has retirement assets generating $100K annually without tapping principal.  He should be posting on FW Finance.

seawolf21 said:   
kriskos4 said:   My 93yo dad lives with me and I'm wondering if I can claim him as a dependent or get some other kind of benefit for 2016 taxes.  He does make about 100K a year from dividends, SS, pension, and CD interest. An accountant does his taxes.  I'm assuming since he files a tax return that I could not list him as a dependent?
  Your 93-year old dad has retirement income generating $100K annually without tapping principal.  He should be posting on FW Finance.

  I think most of it is probably the pension and SS. He would have been 22 year old in 1945!

seawolf21 said:   
kriskos4 said:   My 93yo dad lives with me and I'm wondering if I can claim him as a dependent or get some other kind of benefit for 2016 taxes.  He does make about 100K a year from dividends, SS, pension, and CD interest. An accountant does his taxes.  I'm assuming since he files a tax return that I could not list him as a dependent?
  Your 93-year old dad has retirement income generating $100K annually without tapping principal.  He should be posting on FW Finance.

  
He would tell you to buy and hold...hold for a LONG time.  He bought his last stock almost 50 years ago and has only lost them due to bankruptcy, GM among others.  Most of his income is from dividends.

I do provide more than half his support, he pays me $400 a month which is a joke but it helps I guess.  But it makes no sense for me to claim him if it hurts his own tax situation.  Thanks for the quick replies guys.

kriskos4 said:   I do provide more than half his support, he pays me $400 a month which is a joke but it helps I guess.How are you providing more than half his support if he has $100K of his own income? Are you saying he needs more than $200K/yr in support and you're supplying more than half? I don't think you're saying that if he's giving you back $400/mo... I'm confused.

Perhaps the OP means "physical or mental support", and not financial support? It seems unlikely that over one half of financial support is coming from the OP.

scripta said:   
kriskos4 said:   I do provide more than half his support, he pays me $400 a month which is a joke but it helps I guess.
How are you providing more than half his support if he has $100K of his own income? Are you saying he needs more than $200K/yr in support and you're supplying more than half? I don't think you're saying that if he's giving you back $400/mo... I'm confused.

  
That's exactly what I'm doing, he gives me $400 a month and for that he lives in a master suite, all food and utilities are covered, I cover his celphone and $35 a month newspaper subscription, a lady washes his clothes and cleans the entire house every two weeks.  We used to argue about money but I threw my hands in the air eventually.  He's got a sweet deal but that's not the point, he's my dad.  

OP, the answer is "no."

Good on you for helping your dad out, even if he doesn't strictly "need" the help, family is family. He may not have many years left and enjoy the time you're able to have together.

Also, given his life span, be sure you're investments and retirement strategy reflect/account for a longer-than-average lifespan as being likely.

momoman said:   He should be supporting you and passing it your way.
  The first time I read it as, away, from all the recent inheritance threads here. My bad.

Wow that's a lot of work just to get a $600 credit eh?

Can I marry my father to avoid paying inheritance tax?

Shouldn't this be posted in the "Can I get away with this tax cheat?" Section?

OP: So your paying his cell and quarters, etc. cost you more than 100k per year? Am calling BULLSHIT on that!

qcumber98 said:   Can I marry my father to avoid paying inheritance tax?
  only in alabama and mississippi and some parts of georgia

So what does Dad do with the remaining $95K per year?

1 - none of the details matter. The test for a qualifying relative is different from qualifying child. His gross income is more than the exemption amount and he therefore cannot be a qualifying relative.
2 - absent that part, it doesn't matter how much he makes. The fact that he makes a lot doesn't mean someone doesn't provide more than half of his support. This is often misunderstood, but the distinction is important for the qualifying child test (again, not important for the qualifying relative test because of the difference in the requirements).

I'm just curious, but if OP covers virtually all living expenses and Dad just banks his own healthy income, wouldn't that mean OP is providing more than half the support? It's probably a bad strategy in this scenario for OP to claim the dependent instead of Dad, but the rule is about the amount of support, not income. Seems like it would be a legal option.

[cross posted while marginoferror added the informative post above]

banking the income means he has income. He would have to transfer all his assets into a non revokable trust, and pay fees to file taxes for that trust.
Just so his son can get $600.

NOT WORTH IT

NoMoneyInMyWallet said:   So what does Dad do with the remaining $95K per year?
  Obligatory FW H&B reply.

kriskos4 said:   scripta said:   kriskos4 said:   I do provide more than half his support, he pays me $400 a month which is a joke but it helps I guess.How are you providing more than half his support if he has $100K of his own income? Are you saying he needs more than $200K/yr in support and you're supplying more than half? I don't think you're saying that if he's giving you back $400/mo... I'm confused.That's exactly what I'm doing, he gives me $400 a month and for that he lives in a master suite, all food and utilities are covered, I cover his celphone and $35 a month newspaper subscription, a lady washes his clothes and cleans the entire house every two weeks.  We used to argue about money but I threw my hands in the air eventually.  He's got a sweet deal but that's not the point, he's my dad.  We are talking about $100K/yr and $200K/yr figures, and you're responding with $35/mo, a cleaning lady, and $400/mo. You trollin?

qcumber98 said:   Can I marry my father to avoid paying inheritance tax?
  
Only in California

Mickie3 said:   
OP: So your paying his cell and quarters, etc. cost you more than 100k per year? Am calling BULLSHIT on that!

  
I never even inferred that, nor did I ask how to cheat the IRS.

scripta said:   
kriskos4 said:   
scripta said:   
kriskos4 said:   I do provide more than half his support, he pays me $400 a month which is a joke but it helps I guess.
How are you providing more than half his support if he has $100K of his own income? Are you saying he needs more than $200K/yr in support and you're supplying more than half? I don't think you're saying that if he's giving you back $400/mo... I'm confused.

That's exactly what I'm doing, he gives me $400 a month and for that he lives in a master suite, all food and utilities are covered, I cover his celphone and $35 a month newspaper subscription, a lady washes his clothes and cleans the entire house every two weeks.  We used to argue about money but I threw my hands in the air eventually.  He's got a sweet deal but that's not the point, he's my dad.  

We are talking about $100K/yr and $200K/yr figures, and you're responding with $35/mo, a cleaning lady, and $400/mo. You trollin?

  
You're reading WAY too much into this thread...it was a simple question (that I suspected I knew the answer to) and it was answered on the third response about 90 seconds after I posted it.  I'm on FW for 10 years but yeah, I'm a troll.

NoMoneyInMyWallet said:   So what does Dad do with the remaining $95K per year?
  
Banks all of it and occasionally gives a chunk to my deadbeat brother.  But that's a thread for a different day...

kriskos4 said:   scripta said:   kriskos4 said:   scripta said:   kriskos4 said:   I do provide more than half his support, he pays me $400 a month which is a joke but it helps I guess.How are you providing more than half his support if he has $100K of his own income? Are you saying he needs more than $200K/yr in support and you're supplying more than half? I don't think you're saying that if he's giving you back $400/mo... I'm confused.That's exactly what I'm doing, he gives me $400 a month and for that he lives in a master suite, all food and utilities are covered, I cover his celphone and $35 a month newspaper subscription, a lady washes his clothes and cleans the entire house every two weeks.  We used to argue about money but I threw my hands in the air eventually.  He's got a sweet deal but that's not the point, he's my dad.  We are talking about $100K/yr and $200K/yr figures, and you're responding with $35/mo, a cleaning lady, and $400/mo. You trollin?You're reading WAY too much into this thread...it was a simple question (that I suspected I knew the answer to) and it was answered on the third response about 90 seconds after I posted it.  I'm on FW for 10 years but yeah, I'm a troll.I wasn't reading too much -- I read exactly what you wrote, and it didn't make any sense.

kriskos4 said:   NoMoneyInMyWallet said:   So what does Dad do with the remaining $95K per year?Banks all of it and occasionally gives a chunk to my deadbeat brother. But that's a thread for a different day...You should have started with that. I suspect you may be looking for a loophole in the meaning of "support" -- you provide all the support (food, housing, medicine, etc) while your parent banks or blows their own money. Sounds like tax fraud to me.

And by the way, I think the 3rd response isn't quite complete -- the first result on google said that the $3800/yr income doesn't include social security.

What part of my dad living with me sounds like tax fraud? The only possibility of fraud would be if we both declared his exemption, which I would never do. I feel like his rent would be more realistic at about $2000 a month rather than the $400 he gives me, which is far less than half his living expenses. Like I said I'm dealing with it, I'm more worried about taking care of my dad than what it's costing me.

kriskos4 said:   What part of my dad living with me sounds like tax fraud? The only possibility of fraud would be if we both declared his exemption, which I would never do. I feel like his rent would be more realistic at about $2000 a month rather than the $400 he gives me, which is far less than half his living expenses. Like I said I'm dealing with it, I'm more worried about taking care of my dad than what it's costing me.The part where he's making $100K income and adding $95K to his savings while you try to claim him as a dependent because you think that you provide more than half of his support.

Money is fungible. He does not depend on you and doesn't need your financial support. By not charging him market rent you are basically putting money into his savings account, and you should not be able to extract any tax benefits out of this.

scripta said:   
kriskos4 said:   What part of my dad living with me sounds like tax fraud? The only possibility of fraud would be if we both declared his exemption, which I would never do. I feel like his rent would be more realistic at about $2000 a month rather than the $400 he gives me, which is far less than half his living expenses. Like I said I'm dealing with it, I'm more worried about taking care of my dad than what it's costing me.
The part where he's making $100K income and adding $95K to his savings while you try to claim him as a dependent because you think that you provide more than half of his support.

Money is fungible. He does not depend on you and doesn't need your financial support. By not charging him market rent you are basically putting money into his savings account, and you should not be able to extract any tax benefits out of this.

  
But I'm not trying anything am I...I merely asked a question and got my answer in about 90 seconds after making the original post.  Fact is that I am providing more than half his financial support but I do so willingly and knowing that there is no tax benefit.  I'm surprised I'm getting clobbered for taking care of my pops and asking a very simple question, forget I asked.

I'm not clobbering you for taking care of your pops, you are obviously a good person. We just disagree on semantics. You keep saying that you are providing "more than half of his financial support," but this is clearly and obviously not the case! He makes $100K/yr in income and doesn't spend it! The only way you could possibly honestly say that you are providing more than half of his support would be if he had to spend his entire $100K/yr PLUS you added OVER $100K/yr of your own money on top of that, and all of this > $200K/yr would be spent on his basic living needs, or whatever qualifies as "support". The only things I can imagine are perhaps life support or cancer treatments or something horrible like that.

By the way, not only did I just find the definition of "support", but also an interactive walk-through from IRS to help you figure out if you can claim a dependent.

kriskos4 said:   What part of my dad living with me sounds like tax fraud? The only possibility of fraud would be if we both declared his exemption, which I would never do. I feel like his rent would be more realistic at about $2000 a month rather than the $400 he gives me, which is far less than half his living expenses. Like I said I'm dealing with it, I'm more worried about taking care of my dad than what it's costing me.
  
If his "realistic" part is $2K then you must live in a really nice mansion at over $4K value per month.  Even including utilities and food that is quite a high value considering my very nice rental in Charlotte is around $1500 after utilities.  

 

Food, utilities, transportation, cleaning, lodging isn't worth $2000? A local assisted living place including those things is $4000...I'd say he's getting good a bargain at 10% of that.

kriskos4 said:   Food, utilities, transportation, cleaning, lodging isn't worth $2000? A local assisted living place including those things is $4000...I'd say he's getting good a bargain at 10% of that.
  

What type of medical coverage / care by trained / certified providers do you provide  24 / 7, like the assisted living facility provides?  

You aren't comparing apples and oranges, you are comparing apples and submarines.

 

Those services are available at assisted living but at a fee.

What do you think 1500 sqft living space with utilities, phone, food, cleaning service, transportation is worth?

kriskos4 said:   Those services are available at assisted living but at a fee.

What do you think 1500 sqft living space with utilities, phone, food, cleaning service, transportation is worth?

  

and once again, you are severely uninformed.  Those services are part of the basic package at an assisted living facility (wife worked part time at those places in several states.) 

and as far as the value of your mansion, butler, etc. I would say Chef had it right when he offered the Loch Ness Monster tree-fitty, which is less than dear Old Dad is now paying, so you are actually milking money out of him, eh?

 

kriskos4 said:   Those services are available at assisted living but at a fee.

What do you think 1500 sqft living space with utilities, phone, food, cleaning service, transportation is worth?

  You're missing the point i think I'm gathering from these posts.

HE DOESN'T NEED YOUR MONEY. 
HE DOESN'T SPEND YOUR MONEY ON LIVING.
You are basically GIFTING him a place to stay but other than that what you do IS ABSOLUTELY VOLUNTARY.  

Is that better?   I commend you on what you're doing by the way, but claiming him as a dependent seems highly unlikely.  

Skipping 8 Messages...
kriskos4 said:   Thanks for the explanation, but as I understand it i can't claim him if he wants to claim himself on his own taxes. Is that correct?
  Due to his income, you can't claim him even if he didn't claim himself.  If his taxable income were less than $4,050, then he could not claim himself and you would claim him (assuming you provide over half his support).



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