@Opus 17 wrote:
The regulation clearly says that if the child is emancipated, Section 152(e) does not apply, and whether Child is the qualifying child or qualifying relative of the parents is determined under section 152(c) or (d). Section 152(c) and (d) are the normal qualifying child and qualifying relative rules. Under that interpretation, the children of the original taxpayer here are qualifying children of the taxpayer since they lived in the taxpayer's home. Emancipation doesn't mean the child does not live with either parent, emancipation means that the special rules no longer apply and the child defaults to the normal rules.
Your statement that...
But if the emancipation date is before 6 months passed then custody ends and nobody had custody more than 6 months.
...would mean that a twenty year old student (more than 6 months since their 18th birthday) can't be the qualifying child of a parent even if they lived with the parent the entire year. So your statement disagrees with the regulation. (And note the regulation says, in the year the child turns 18 "and later years" dependency is determined under section 152(c) and (d). )
(Where this gets wonky is that the regulation, specifically § 1.152-4(g), Example 6, directly conflicts with IRS publication 501, example 6 on page 13. When the regulation conflicts with the publication, the regulation wins, so I'm going to ignore that for now.)
I don't thing there is any conflict in the regs.
Section 152(e) is the special rules that deal with custody.
Custody requires living with one parent more the half the year (more then 183 nights) before the child becomes emancipated. If that is the case then §152(e) applies. If the 183 night test cannot be met because the child became emancipated then §152(e) does not apply.
That is what the examples in the publication say and so do the examples 6 & 7 in § 1.152-4(g). Example 7(iii)"
(iii) Under paragraph (d)(1) of this section, Child is treated as not residing with either parent after Child's emancipation. Therefore, Child resides with F for 151 nights and with G for 61 nights. Because the requirements of paragraphs (b)(2) and (3) of this section are met, section 152(e) and this section apply, and G may claim Child as a dependent.
That example says that the parent that was NOT the custodial parent CAN claim the child because there was a 8332 agreement that is in effect because the child became emancipated after half the year rule was met.
Example 6 says bacaue the half the year custody rule was not met because the child became emancipated prior to the 6 months, then the 152(e) special 8332 rules no longer can app;y.
I think that is what I was saying.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
