Daniel D. McBol Aruai - Page 15

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               The residency test requires that the qualifying child have             
          the same principal place of abode within the United States as the           
          taxpayer for more than one-half of the taxable year.  Sec.                  
          32(c)(3)(A)(ii), (E).  Petitioner did not have the same principal           
          place of abode as KGT or JTW; thus, neither is a qualifying                 
          child.                                                                      
               Nonetheless, subject to phaseout limitations, an individual            
          who does not have any qualifying children may be eligible for an            
          earned income credit under section 32(a) if:  (1) The                       
          individual’s principal place of abode is in the United States;              
          (2) the individual, or his spouse, has attained the age of 25 but           
          not the age of 65 at the close of the taxable year; and (3) the             
          individual is not a dependent for whom a deduction is allowed               
          under section 151.  Sec. 32(c)(1)(A).                                       
               Petitioner’s earned income for 2003 was $16,698.  Although             
          petitioner satisfies the eligibility requirements, the phaseout             
          limitation prevents the receipt of any earned income credit.  The           
          earned income credit for an individual without any qualifying               
          children is completely phased out in tax year 2003 when an                  
          individual’s earned income exceeds $11,230.  Rev. Proc. 2002-70,            
          2002-2 C.B. 845, 848; see IRS Pub. 596, Earned Income Credit                











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