Head of Household Qualifications


R

roy wildsmith

I am a single working mom and have three children who are under 16 and
in school who I properly claim as dependents. I live with my Mother
and Father in their home. A tax preparer has told me I should file
as head of houshold without questioning the amount I pay toward the
househole costs. Is there any way I can do that. The house is a
large old home, and there is no way I could be paying 50% of the
househole costs considering my income. I support my children without
child support payments, making payments to my parents to cover my
familyies share of food and utilities. but fall short in covering
costs such as property tax, mortgage interest. These costs would be
covered by my parents if I lived with them or not. What should I do
about filing status regareding HOH?
 
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G

Gene E. Utterback, EA, ABA

"roy wildsmith" wrote in message

I am a single working mom and have three children who are under 16 and
in school who I properly claim as dependents. I live with my Mother
and Father in their home. A tax preparer has told me I should file
as head of houshold without questioning the amount I pay toward the
househole costs. Is there any way I can do that. The house is a
large old home, and there is no way I could be paying 50% of the
househole costs considering my income. I support my children without
child support payments, making payments to my parents to cover my
familyies share of food and utilities. but fall short in covering
costs such as property tax, mortgage interest. These costs would be
covered by my parents if I lived with them or not. What should I do
about filing status regareding HOH?

--
<< ------------------------------------------------------- >>

My first question to you is this "why are you not getting child support?"
The father has a legal responsibility to pay for his kids so the mother
isn't unduly burdened and so the rest of us don't have to carry his share.

About HoH in your situation - this is a tricky area and you're going to get
a LOT of different responses. There are some very good regulars here, some
professionals and some not, who will disagree with what I'm going to tell
you. This is normal, ask 100 people, get 101 different answers.

A household is defined as a space - when you rent an apartment, that
apartment becomes your household. If you rent an apartment in the basement,
that basement apartment is your household even though you don't occupy the
rest of the house. If you rented a room in my house, and we shared certain
common areas (kitchen, laundry, etc.) you'd still have a household. The IRS
even has rules and instructions written out for people who rent out PART of
their home.

So if two single parents, each with a child, were to rent a 4 bedroom house
(one bedroom for each adult and one for each child) the building would
consist of TWO households and IN MY OPINION it could result in HoH for BOTH.
Unless and Until they share a conjugal bed - if they are living as a couple
then there is ONLY ONE household and only one may file as HoH.

In your situation, if you're paying rent to mom and dad (and I mean really
paying rent at CLOSE to fair market value) then I think you could qualify as
HoH. But if you're not paying rent, you're just buying food for you and
your kids and paying the extra $10 to have a cable box in your room, they I
think you'd have to file as single, with dependent children.

Be careful, there are more than few unscrupulous people out there who would
gladly help you cheat on your tax return to get you bigger refund. Most
because they think they have to in order to justify their fee. If you are
uncomfortable with what you've been told you've taken the first step by
getting a second opinion. Feel free to check with other tax pros in your
area.

And take a look at the IRS instructions for Form 1040, pay specific
attention to the section on filing status.

Good luck,
Gene E. Utterback, EA, RFC, ABA
 
A

Alan

--
<< ------------------------------------------------------- >>

My first question to you is this "why are you not getting child
support?" The father has a legal responsibility to pay for his kids so
the mother isn't unduly burdened and so the rest of us don't have to
carry his share.

About HoH in your situation - this is a tricky area and you're going to
get a LOT of different responses. There are some very good regulars
here, some professionals and some not, who will disagree with what I'm
going to tell you. This is normal, ask 100 people, get 101 different
answers.

A household is defined as a space - when you rent an apartment, that
apartment becomes your household. If you rent an apartment in the
basement, that basement apartment is your household even though you
don't occupy the rest of the house. If you rented a room in my house,
and we shared certain common areas (kitchen, laundry, etc.) you'd still
have a household. The IRS even has rules and instructions written out
for people who rent out PART of their home.
This subject seems to pop up here every two or three years.

The issue of two families occupying the same physical building and
maintaining separate households for purposes of filing as HoH was
addressed in Estate of Fleming v. Commissioner, 33 T.C.M. 619 (1974),
acq., 1974 AOD LEXIS 65. This was followed by the IRS publishing Chief
Counsel Memorandum SCA 1988-041 that explains their position.
http://www.irs.gov/pub/irs-wd/1998-041.pdf There have been subsequent
tax court decisions on this issue.

Both the court case and the IRS guidance make it clear that 1. it is
possible to have more than one household at the same physical address
and that 2. whether there is two separate households is a matter of all
the facts and circumstances and 3. the burden of proof is on the
taxpayer(s) to show that there are two separate households for purposes
of filing as HoH and 4. having shared space (e.g., a kitchen) does not
in itself say that there is only one household.

So... while in almost every case the physical boundaries do define the
household, there are times when the physical boundaries can contain more
than one household. When the situation arises, the two families will
have to show that they actually live their lives in two separate
households and they must maintain records that accurately reflect what
each family is paying for maintaining their separate household.

Given the nature of parents and children living together, it would be
extremely rare that a single parent living with a child(ren) in her
parent's home would be able to show that they lived their lives in a
separate household from her parents.

Please note that the IRS acquiesced to the tax court's favorable
decision for the taxpayer.
 
R

roy wildsmith

This subject seems to pop up here every two or three years.

The issue of two families occupying the same physical building and
maintaining separate households for purposes of filing as HoH was
addressed in Estate of Fleming v. Commissioner, 33 T.C.M. 619 (1974),
acq., 1974 AOD LEXIS 65. This was followed by the IRS publishing Chief
Counsel Memorandum SCA 1988-041 that explains their position.http://www.irs.gov/pub/irs-wd/1998-041.pdfThere have been subsequent
tax court decisions on this issue.

Both the court case and the IRS guidance make it clear that 1. it is
possible to have more than one household at the same physical address
and that 2. whether there is two separate households is a matter of all
the facts and circumstances and 3. the burden of proof is on the
taxpayer(s) to show that there are two separate households for purposes
of filing as HoH and 4. having shared space (e.g., a kitchen) does not
in itself say that there is only one household.

So... while in almost every case the physical boundaries do define the
household, there are times when the physical boundaries can contain more
than one household. When the situation arises, the two families will
have to show that they actually live their lives in two separate
households and they must maintain records that accurately reflect what
each family is paying for maintaining their separate household.

Given the nature of parents and children living together, it would be
extremely rare that a single parent living with a child(ren) in her
parent's home would be able to show that they lived their lives in a
separate household from her parents.

Please note that the IRS acquiesced to the tax court's favorable
decision for the taxpayer.












--
Alanhttp://taxtopics.net

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Thank you for the very detailed and thoughtful reply. As far as
the child support question, to make a long story short, the courts
decided to trade off the support payments in exchange for the father
paying all transportation costs for my children making prescribed
visitations. This was done to facilitate my taking the children out
of state to return to my original place of residence which prevented
their father from having typical contact . Regarding the HOH
question, you have confirmed my concerns about filing that status.
Thank you again.
 
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R

removeps-groups

A household is defined as a space - when you rent an apartment, that
apartment becomes your household.  If you rent an apartment in the basement,
that basement apartment is your household even though you don't occupy the
rest of the house.  If you rented a room in my house, and we shared certain
common areas (kitchen, laundry, etc.) you'd still have a household.  The IRS
even has rules and instructions written out for people who rent out PART of
their home.
True, but kids living with their grandparents seems like one
household. If it were some unrelated person, like me, living in that
household then HoH might work, but now I'm skeptical.

And of course, the other question is whether FMV rent is being paid,
as you indicated further in your post. From the sentence "there is no
way I could be paying 50% of the household costs considering my
income" I'm guessing the answer might be no.

Worst case, maybe the grandparents can claim the grandkids.
 

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