First of all let me say "wow" and thank you for the very clear responses from @Carl @Bsch4477 and @Opus 17
I had poured over IRS documents, FAQ's, etc. and I made two mistakes
- School is considered 'temporary' if they come home, even if they spend most of their time at school. (I guess if you remodeled their room to be a gym and put their stuff in storage, and all of their mail went to their school address you could argue they were not living at home but in the typical situation college kids are considered living at home if they come back to it in the usual way)
- Handling of Gifts -- I was stuck on how the test for 50% was worded "did he provide 50% of his own support" and thought "well, if we gifted him the money and he used it to support himself then I guess he did" but as you have pointed out the practical effect of gifting him money to live is he really didn't provide it.
This all sort of makes sense to me intuitively as a kind of 'common sense' reading of the tax code.
As an thought experiment if we had gifted him $10,000 at birth and that was used to buy Apple stock in a custodial brokerage account that would be worth $4.5M today and then we said "hey you could afford whatever you want go for it" and didn't give him any support and remodeled his room to be a home Gym then he could be a student under 24 who is not a dependent because he would be spending his money for support and didn't have a room at our house any more.
Anyway thanks -- you guys have been super clear and helpful
