Dependent Claiming Question ?

[Bob]

Hello,

Have an adult son, who, for various reasons, I provide
full, free, room and board, food, etc.

Also, dollars, along with some aid from the State, for his health insurance.

I have been taking him off on my taxes as a Dependent, since I pay
literally all of his living costs.

We have just found some very, very, old Saving Bonds (in his name).
No longer accruing any interest, so he is thinking of cashing them in,
of course.

Questions, please:

a. Would the value of them, or the interest only portion (most of the
value now), possibly prohibit me from claiming him as a Deduction ?

e.g., would it be considered as "income" for determining his eligibility
as a Dependent ?

Or, must it be true "earned income" to be considered ?

Or,...?

b. If it is "income", what would be the magic number where he no longer
could be considered a Dependent ?

Any other thoughts on all of this would be most appreciated.

Much thanks,
B.

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[Bob Sandler]

>Have an adult son, who, for various reasons, I provide
>full, free, room and board, food, etc.
>Also, dollars, along with some aid from the State, for his health insurance.
>I have been taking him off on my taxes as a Dependent, since I pay
>literally all of his living costs.
>
>We have just found some very, very, old Saving Bonds (in his name).
>No longer accruing any interest, so he is thinking of cashing them in,
>

>Questions, please:
>
>a. Would the value of them, or the interest only portion (most of the
>value now), possibly prohibit me from claiming him as a Deduction ?
>e.g., would it be considered as "income" for determining his eligibility
>as a Dependent ?
>Or, must it be true "earned income" to be considered ?

The interest on the savings bonds would be considered
income. All income counts, not just earned income.

>b. If it is "income", what would be the magic number where he no longer
>could be considered a Dependent ?

If he is 24 or older and not disabled, his gross income
would have to be less than $4,000 (for 2015) in order for
you to claim him as a dependent.

>Any other thoughts on all of this would be most appreciated.

Since you said he's an adult, I assumed that he is 24 or
older and not disabled. If he is under 19, or under 24 and a
student, or any age and disabled, different rules might
apply and his income might not matter.

Bob Sandler

[Arthur Rubin]

On Thursday, June 25, 2015 at 12:45:03 PM UTC-7, Bob wrote:
> Hello,
>
> Have an adult son, who, for various reasons, I provide
> full, free, room and board, food, etc.
>
> Also, dollars, along with some aid from the State, for his health insurance.

I agree with Bob Sandler, with a few possible exceptions, only one of which I am sure. If you supply more than half of his "support" (as defined in tax law, you can take the medical expenses (including medical insurance) that you pay for him as a medical deduction on your return. It may not effect your taxes, as medical expenses have to hit 10% of AGI before they can be claimed at all, but it may be worth considering. The income limit does not apply to that form of "dependent" deduction.

Arthur Rubin
CRTP, ATFP, Brea, CA