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Wendy Reed
Wendy Reed, Enrolled Agent
Category: Tax
Satisfied Customers: 3345
Experience:  15+ years tax preparation and tax advice.
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I am preparing someones tax (2010 yr in jan 2011) . the taxpayer

Customer Question

I am preparing someone’s tax (2010 yr in jan 2011) . the taxpayer had no income whatsoever.she wants to be claimed as a dependent on her daughter’s return. Her daughter paid over 1/2 of her expenses and she earned less than 3660 (exemption)

except (mother )she owned a rental property and the gross rental (sent on 1099) of 20,000

and rental expenses were 16,000. therefore the net before depreciation was 4000.

The depreciation (5000) was added and the loss was (-1000) loss.

Can her daughter take her as a dependent?



Will the irs say the mother had 20,000 (1099) income and dissallow the depenancy

On her daughters return or her income for this purpose be accecpted as the 1000 loss
Submitted: 3 years ago.
Category: Tax
Expert:  Wendy Reed replied 3 years ago.

Thank you for giving me the opportunity to assist you. I will give the best answer that I can with the information provided.

 

Hello,

 

I am a little confused as to why the rental was sent on a 1099? Is this a 1099MISC? Which box is checked?

 

Are you saying that the daughter earned only $3600? What is the daughter's other income? How old is the daughter?

Customer: replied 3 years ago.

the rental income was on a 1099 because it was collected by a rental agent.

 

the daughter makes about 110,000 and paid more than 3660 toward her mother's living

 

expenses. the daughter is 30 years old

Expert:  CGCPA replied 3 years ago.

Welcome to Just Answer. I am here to help you resolve your tax and finance concerns. Please feel free to ask anytime you need extra help.

 

The daughter can claim her as a dependent because the rental income is not added at gross but is taken into account at the net which is a loss.

Expert:  Wendy Reed replied 3 years ago.

The daughter will NOT be able to claim her mother as a dependent. Under Gross Income Rule for Dependents, the definition of Gross income includes Gross Receipts from rental property. Deductions are not used to determine gross income from rental property.

 

This rule can be found in 2009 Publication 17, page 33:

 

http://www.irs.gov/pub/irs-pdf/p17.pdf

 

Please let me know if I can assist you further.

Wendy Reed, Enrolled Agent
Category: Tax
Satisfied Customers: 3345
Experience: 15+ years tax preparation and tax advice.
Wendy Reed and 5 other Tax Specialists are ready to help you
Customer: replied 3 years ago.
wendy reiger ea answered my question and said the daughter cannot take the deduction because the rental income is considered at the gross not net. ???
Expert:  Wendy Reed replied 3 years ago.
Are you asking for a second opinion? You should have gotten an email that one other expert agreed with my answer.
Customer: replied 3 years ago.

charles greier cpa has said that i can take deduction because rental income is figures at the net. help.

john

Expert:  Wendy Reed replied 3 years ago.
I stand by my original answer and have given you a written, checkable reference. Another Tax expert has seen both responses you were given and has agreed with mine. I will see if I can get a 4th opinion if you would like.
Customer: replied 3 years ago.

i trust you i used you before (take you for getting the third opnion) i already paid you correct?

 

note i don't know why i received multiple answers

john caruso

Expert:  Anne replied 3 years ago.
It is unfortunate that another tax expert decided to answer this question and gave you the wrong information at that. Most of us do not interfere once an expert has started with a customer, especially when someone as experienced as Wendy is handling the question.

As a tax pro and Enrolled Agent for 25 years, I can tell you that Wendy gave you the correct information, and her answers can absolutely be trusted to be correct.

Please do not hit the green "accept" button for this answer. My only reason for "answering" your question was to be the 4th expert that agrees with the answer that you received from Wendy, and to let you know that having multiple answers from tax experts is NOT normally how this site works, and it was unfortunate that it happened with your question.

Hopefully, this will help set your mind at ease regarding your payment to Wendy, since she gave you the correct information. In the future, if you have tax questions, you may specifically ask for Wendy by name to answer your question, and that will assure that you do not receive differing opinions from other tax experts.

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