Tax Exemptions and 50/50 timeshares

[LdiJ]

What is the name of your state (only U.S. law)? NA for this thread, its federal.

We always have questions about tax exemptions in this forum and most of the time its clear cut. However, the issue of 50/50 timeshares has been a bit murky. Technically the rule is that if you have a true 50/50 timeshare then the parent with the higher AGI is the parent who can claim the children and the credits that only the custodial parent is allowed to receive.

However, there has always been a little debate on that issue since unless its a leap year, there is an odd number of days in the year, therefore there cannot be a true 50/50.

There has been a recent tax case that has addressed this specific issue. Phillips, TC Memo 1011-199. In this case the parents had a 50/50 timeshare but due to holidays and when the weeks fell, the mother ended up with 5 more overnights than dad that year. The court ruled that mom was the custodial parent for that year and the exemptions were denied to dad.

So..those of you out there with 50/50..keep in mind that the actual number of overnights counts, even if the difference is minimal and only due to holidays etc.

Even if you and your ex are cooperatively sharing the children's exemptions, if you didn't have the child the most overnights that year, you won't be able to claim head of household, EIC, the child tax credit or education credits, and you will need a signed form 8332 from the other parent.

 

[nextwife]

What is the name of your state (only U.S. law)? NA for this thread, its federal.

We always have questions about tax exemptions in this forum and most of the time its clear cut. However, the issue of 50/50 timeshares has been a bit murky. Technically the rule is that if you have a true 50/50 timeshare then the parent with the higher AGI is the parent who can claim the children and the credits that only the custodial parent is allowed to receive.

However, there has always been a little debate on that issue since unless its a leap year, there is an odd number of days in the year, therefore there cannot be a true 50/50.
There has been a recent tax case that has addressed this specific issue. Phillips, TC Memo 1011-199. In this case the parents had a 50/50 timeshare but due to holidays and when the weeks fell, the mother ended up with 5 more overnights than dad that year. The court ruled that mom was the custodial parent for that year and the exemptions were denied to dad.

So..those of you out there with 50/50..keep in mind that the actual number of overnights counts, even if the difference is minimal and only due to holidays etc.

Even if you and your ex are cooperatively sharing the children's exemptions, if you didn't have the child the most overnights that year, you won't be able to claim head of household, EIC, the child tax credit or education credits, and you will need a signed form 8332 from the other parent.

Just mulling a thought about this ruling and the role of overnights.

Actually, I would think there could be 50/50, or that one parent could end up with more overnights due to all the nights one's child might be doing overnights away from EITHER parent. Overnight camp, youth group retreats, sleepovers at friend's homes, sleepover birthday parties, winter camp, overnights at a cousin or a grandparent and so on.

If one is counting this deduction based upon how many overnights a child has with each parent, then shouldn't overnights NOT in the home also be counted?

Really, how many parents, even if both parents are together, have their kids overnight on EVERY night of the year? There are many nights one's child might be away and not sleeping in their home OR with either parent.

 

[tranquility]

I think the point is, tax wise, the rules are technical and exacting and not kinda about.

 

[LdiJ]

I think the point is, tax wise, the rules are technical and exacting and not kinda about.

Exactly....

Also Nextwife, the IRS would consider the kinds of things you mentioned as temporary absences from the home, and those would count as belonging to the parent to whom they normally would have belonged.

 

[mistoffolees]

I think the point is, tax wise, the rules are technical and exacting and not kinda about.

Yes, but this example wasn't really very enlightening. It simply affirmed the rule that has always been in place. The parent who has the most nights gets the deduction. Not the parent with the most nights in an average year, but in that tax year.

All the decision said was "Mom had more nights that year, so Mom gets the deduction". Nothing new or complicated there.

Just mulling a thought about this ruling and the role of overnights.

Actually, I would think there could be 50/50, or that one parent could end up with more overnights due to all the nights one's child might be doing overnights away from EITHER parent. Overnight camp, youth group retreats, sleepovers at friend's homes, sleepover birthday parties, winter camp, overnights at a cousin or a grandparent and so on.

If one is counting this deduction based upon how many overnights a child has with each parent, then shouldn't overnights NOT in the home also be counted?

Really, how many parents, even if both parents are together, have their kids overnight on EVERY night of the year? There are many nights one's child might be away and not sleeping in their home OR with either parent.

If the child is at a friend's house for the night, the parent who is scheduled for that night would count it. After all, they're still in the care and responsibility of that parent even if they're somewhere else.

 

[LdiJ]

Yes, but this example wasn't really very enlightening. It simply affirmed the rule that has always been in place. The parent who has the most nights gets the deduction. Not the parent with the most nights in an average year, but in that tax year.

All the decision said was "Mom had more nights that year, so Mom gets the deduction". Nothing new or complicated there.

I think that the affirmation is important, because its a frequently debated issue (only somewhat here, but more so out there in the world) and this helps the doubters understand that the rules are indeed, exact.

If the child is at a friend's house for the night, the parent who is scheduled for that night would count it. After all, they're still in the care and responsibility of that parent even if they're somewhere else.

Absolutely...as I stated above.