Dependent - Passing On

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Related topics & pages:   Dependent - Citizenship Test - Dependent - Member of Household or Relationship Test - Dependent - Joint Return Test - Dependent Gross Income Test - Dependents Support Test - Dependent Care Credit - Dependent Test Presentation - Dependent Child Tax Credit Worksheet Credit - Dependent Care - Introduction

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• Learning Objectives 

  • May I legally claim the dependency deduction/exemption for a member of my household passing away before the end of the year?

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• Plain English Analysis What it does, Why it works - 

  • What it does: The person may be claimed as  a dependent in the year of passing on as long as the person was considered a "member of the taxpayer's household" for the entire period preceding the passing on.  Once a relationship is established, death or divorce does not terminate it. Thus, for example, the relationship of a son-in-law and mother-in-law survives the spouse's death or a divorce.

  • Why it works:  IRC §152 and IR Reg 1.152-1(b)

  • Death of spouse. If your spouse died during the year, you can generally claim your spouse's exemption under the rules just explained under Joint return and Separate return.

    If you remarried during the year, you cannot take an exemption for your deceased spouse.

    If you are a surviving spouse without gross income and you remarry in the year your spouse died, you can be claimed as an exemption on both the final separate return of your deceased spouse and the separate return for that year of your new spouse. If you file a joint return with your new spouse, you can be claimed as an exemption only on that return.

  • Child born alive. If your child was born alive during the year, and the exemption tests are met, you can take the full exemption. This is true even if the child lived only for a moment. Whether your child was born alive depends on state or local law. There must be proof of a live birth shown by an official document, such as a birth certificate.

  • Stillborn child. You cannot claim an exemption for a stillborn child.

  • Death of dependent. If your dependent died during the year and otherwise met the exemption tests, you can take an exemption for your dependent.

    Example. Your dependent mother died on January 15. The five exemption tests are met. You can take a full exemption for her on your return.

  • Remember there are five tests to be met before the deduction is allowed: -->
    • Citizenship Test. Dependent - Citizenship Test
    • Member of Household or Relationship Test. Dependent - Member of Household or Relationship Test
    • Joint Return Test. Dependent - Joint Return Test
    • Gross Income Test. Dependent Gross Income Test
    • Support Test. Dependents Support Test

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  • Regs:  (b) Section 152(a)(9) applies to any individual (other than an individual who at any time during the taxable year was the spouse, determined without regard to section 153, of the taxpayer) who lives with the taxpayer and is a member of the taxpayer's household during the entire taxable year of the taxpayer. An individual is not a member of the taxpayer's household if at any time during the taxable year of the taxpayer the relationship between such individual and the taxpayer is in violation of local law. It is not necessary under section 152(a)(9) that the dependent be related to the taxpayer. For example, foster children may qualify as dependents. It is necessary, however, that the taxpayer both maintain and occupy the household. The taxpayer and dependent will be considered as occupying the household for such entire taxable year notwithstanding temporary absences from the household due to special circumstances. A nonpermanent failure to occupy the common abode by reason of illness, education, business, vacation, military service, or a custody agreement under which the dependent is absent for less than six months in the taxable year of the taxpayer, shall be considered temporary absence due to special circumstances. The fact that the dependent dies during the year shall not deprive the taxpayer of the deduction if the dependent lived in the household for the entire part of the year preceding his death. Likewise, the period during the taxable year preceding the birth of an individual shall not prevent such individual from qualifying as a dependent under section 152(a)(9). Moreover, a child who actually becomes a member of the taxpayer's household during the taxable year shall not be prevented from being considered a member of such household for the entire taxable year, if the child is required to remain in a hospital for a period following its birth, and if such child would otherwise have been a member of the taxpayer's household during such period.
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