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I wish to claim may girlfriend as a dependent and file as a head of household. I understand she must meet 5 tests to qualify as a dependent. The only difficult one will be the support test (she is a full-time student under age 24, US citizen, no joint returns, and will live with me for all of 1998).

Under the support test I understand I can claim (as support) food, lodging, clothing, education, medical, dental, etc. and she has to claim all student loans but not scholarships.

My question is whether I can claim 401K contributions in which she is the sole beneficiary as well as Roth IRA contributions as support to her. Furhter, how closely must I track recreation and other intangible expenditures. (I will be very close to making this test).

Also, I will be taking a $1000 lifetime learning credit for myself (part-time student). May I also take a $1000 lifetime learing credit for her providing that I can claim her as a dependent?
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<<I wish to claim may girlfriend as a dependent and file as a head of household. I understand she must meet 5 tests to qualify as a dependent. The only difficult one will be the support test (she is a full-time student under age 24, US citizen, no joint returns, and will live with me for all of 1998). >>

There are two separate tests here. One, HOH filing status, is NOT met because your girlfriend, supported or not, is not a qualfied person for this test. Let me know if you want the Code site for this.

Two, you may want to re-examine the relationship test for dependents. An unmarried live-in may qualify, but it depends on whether the relationship violates local law. Some states do not recognize common-law marriage and prohibit unmarried intimate relationships. Perhaps you've already looked at this and are comfortable with your state laws, but I thought I'd ask since if you fail here, the rest of your question is moot.
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i believe I would disagree with one point. It does not matter whether you violate local law to the IRS. For instance, if you sell marijuana for profit, you are still supposed to report the income on schedule C just like any other entrepreneur. On the other hand the IRS recognizes local property law, i.e. Community property states handle some things differently from the others and then there is common law marriages, all of which are recognized by the IRS if local law dictates. The question here though is whether the live in meets the 5 tests. It sounds like she does.

Joe Varga
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<<...It does not matter whether you violate local law to the IRS. >>

I believe this is a time when local law does matter. The 1040 instructions spell out the five tests to meet in order to be considered a dependent. Under test 1, the relationship test, a number of family members are listed as qualifying (son, daughter, foster child, parents, etc.). The instructions state: "If the person is not your relative, the relationship must not violate local law." Pub. 501 also has similar language. Court cases have gone both ways on this issue, with the outcome depending on the state law of the taxpayer. Since this is tricky, I wanted to be sure Berger1000 considered it before discussing the rest of his question.
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Thanks for the input. I didn't know that. That means of course that here in Utah, where polygamy is more common than the rest of the country would believe, we must have some really interesting tax returns.

Joe Varga
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[[i believe I would disagree with one point. It does not matter whether you violate local law to the
IRS.]]

But it DOES matter to IRS regarding local law and the relationship test regarding filing status and dependent status.

The code clearly states that if the relationship is in violation of local law, it is not a "valid" relationship for federal income tax purposes.

I'll be glad to quote you chapter and verse if you would like to see it. Just let me know.

TMF Taxes
Roy
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