She cannot be a qualifying relative because "she earned a decent salary since starting her MA job".
It's clear that meeting the qualifying child rules hinges on the support test.
Q. "How do we compare how much it was while she was home versus while she is living in her new apartment?"
A. You do the math. 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. Moving expenses and tuition also count as support.
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
A qualifying child must also meet theses rules:
- They are a U.S. citizen, resident alien, national, or a Canadian or Mexican resident.
- They aren't (or won't be) claimed as a dependent by someone else.
- They aren’t filing a joint return with their spouse.
