Question

Scenario:

Mike and Carol Gold's 12-year-old daughter Rebecca was abducted on her way home from school on May 15, 2016. Police reports indicated that a stranger had physically dragged Rebecca into a waiting car and sped away. Everyone hoped that the kidnapper and Rebecca would be located quickly. However, as of the end of the year, Rebecca was still missing. The police were still pursuing several promising leads and had every reason to believe that Rebecca was still alive. In 2017, Rebecca was returned safely to her parents. Are the Golds allowed to claim an exemption deduction for Rebecca in 2016 even though she only lived in the Gold's home for four-and-one-half months?

Requirements: Using RIA Checkpoint, research the answer to the question. Use key word search and only the Internal Revenue Code to find your answer.

Write a less sophisticated client letter to the Golds. Keep your letter to 1 page.

On the second page, include the key word(s) used in your search and provide the exact citation for the Internal Revenue Code where you found your answer.

For example, §101 is not a sufficient citation. But, §101(b)(2) would be.

Answer 1

The IRS says parents may claim a kidnapped child as a dependent if two conditions are met.

First, the child must be presumed by law enforcement to have been kidnapped by someone who is not a family member.

Secondly, during the taxable year in which the kidnapping occurred, the child must have lived at the taxpaying parent's same principal place of residence for more than one-half of year before the date of the kidnapping.

When both of those requirements are met, the parent of the kidnapped youngster generally can claim the child as a dependent and get the associated exemption, as well as the child tax credit if that tax break's rules are met.

so here gold can claim deduction because rebecca live one and half year before kidnapping . in the given question rebecca live only in 2016 four and half year . in the year 2016 but here we consider total period one and half year before kidnapping . not only a particular year.