Multiple Support Agreement

Multiple Support Agreement

If two or more persons who would otherwise be entitled to an exemption for a dependent other than a qualifying child, together furnish more than half the dependent's support (but no one individual provides more than half), any one of them who furnishes more than 10% of the support is entitled to the exemption if all the others who furnished more than 10% of the support file written declarations that they will not claim an exemption for the individual for that taxable year. Form 2120 is used for this purpose.
References in periodicals archive ?
the child's support is determined under a multiple support agreement; or
In community property states, the exemption may be lost unless the taxpayers execute a multiple support agreement.
Other reimbursements include amounts received by a taxpayer from (1) social security and state old age assistance in his capacity as his dependent mother's guardian;(36) (2) his brothers for his mother who was a dependent under a multiple support agreement;(37) and (3) his aunt's pension.(38)
* Deciding who among a group supporting an individual should be entitled to claim the individual as a dependent under a multiple support agreement. * Paying directly the dependent's medical care or nursing home expenses.
From the standpoint of minimizing taxes for the family as a whole, the taxpayer entitled to claim a dependent under a multiple support agreement should be the one who would realize the greatest tax savings from the medical or nursing home expense deductions.
Head of household filing status is not available to taxpayers who can claim the dependency exemption under a multiple support agreement. However, a taxpayer can claim head of household status if the taxpayer provides more than half the cost of maintaining a home that was the main home of the taxpayer's parent, even if the parent did not live with the taxpayer, as long as the parent satisfies the dependency test.
If more than one child shares in a parent's support, multiple support agreements (MSAs) may be used to realize tax savings.
There are exceptions for multiple support agreements and children of divorced parents.
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