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If my son has 15K in investment income but I pay for college tuition and living expenses can i claim his as a dependent?

If my son has investment income of $15,000, is 24 years old and still in college, but I pay for his tuition and living expenses is he a dependent
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1 Reply
Hal_Al
Level 15

If my son has 15K in investment income but I pay for college tuition and living expenses can i claim his as a dependent?

Q. Can i claim his as a dependent?

A. Yes.

 

There are two types of dependents, "Qualifying Children"(QC) and Other ("Qualifying Relative" in IRS parlance even though they don't have to actually be related). There is no income limit for a QC but there is an age limit, student status, a relationship test and residence test.

A child of a taxpayer can still be a “Qualifying Child” (QC) dependent, regardless of his/her income, if:

  1. He is under age 19, or under 24 if a full time student for at least 5 months of the year, or is totally & permanently disabled
  2. He did not provide more than 1/2 his own support. Scholarships are excluded from the support calculation
  3. He lived with the parent (including temporary absences such as away at school) for more than half the year

 

So, it doesn't matter how much income he has. What matters is how much he spent on support. Money he put into savings does not count as support he spent on himself.

The support value of the home, provided by the parent, is the fair market rental value of the home plus utilities & other expenses divided by the number of occupants.

The IRS has a worksheet that can be used to help with the support calculation. See: http://apps.irs.gov/app/vita/content/globalmedia/teacher/worksheet_for_determining_support_4012.pdf

 

Furthermore, there is a rule that says IF somebody else CAN claim him as a dependent, he is not allowed to claim himself. If he has sufficient income (usually more than $13,850; only $1250 for investment income), he can & should still file taxes. In TurboTax, he indicates that somebody else can claim him as a dependent, at the personal information section.  TT will check that box on form 1040.

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