Fernando D. Rivera - Page 5

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          and the standard deduction applicable to a head of household.  He           
          claimed an earned income credit computed by treating two of his             
          nephews as qualifying children.                                             
               In the notice of deficiency, respondent:  (1) Disallowed the           
          dependency exemption deductions for petitioner’s nephews; (2)               
          changed petitioner’s filing status from head of household to                
          single and adjusted the standard deduction accordingly; (3)                 
          disallowed the earned income credit claimed on petitioner’s 1997            
          return; and (4) imposed an addition to tax under section                    
          1. Dependency Exemption Deductions                                          
               Petitioner claimed dependency exemption deductions for his             
          three nephews on his 1997 return.  Generally, a taxpayer is                 
          entitled to an exemption deduction for each dependent.  Sec.                
          151(c).  The term “dependent” includes a taxpayer’s nephews “over           
          half of whose support, for the calendar year * * * was received             
          from the taxpayer”.  Sec. 152(a)(6).  “The term ‘support’                   
          includes food, shelter, clothing, medical and dental care,                  
          education, and the like.”  Sec. 1.152-1(a)(2)(i), Income Tax                
               During 1997, petitioner’s nephews did not receive any                  
          food, shelter, clothing, etc. from their parents.  Instead,                 
          substantially all of their support was received from petitioner,            

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