Noel Colstock - Page 6

                                        - 5 -                                         
         income.  Sec. 32(a)(1).  Section 32(a)(2) and (b) limit the                  
         credit allowed based on whether the eligible individual has no               
         qualifying children, one qualifying child, or two or more                    
         qualifying children.                                                         
              Section 32(c)(1)(A)(i), in pertinent part, defines an                   
         “eligible individual” as “any individual who has a qualifying                
         child for the taxable year”.  A qualifying child includes a son              
         or daughter of the taxpayer who has the “same principal place of             
         abode as the taxpayer for more than one-half of such taxable                 
         year”.  Sec. 32(c)(3)(A)(ii) and (B)(i)(I).                                  
              Ms. Johnson testified that LJ lived with her during 2002 and            
         that they did not live with petitioner.  Petitioner has failed to            
         prove that LJ lived with him; therefore, the Court finds that LJ             
         is not a qualifying child under section 32(c)(3)(A)(ii).                     
              A taxpayer with no qualifying children may be eligible for              
         the earned income credit subject to, among other things, the                 
         phaseout limitations of section 32(a)(2).  Merriweather v.                   
         Commissioner, T.C. Memo. 2002-226; Briggsdaniels v. Commissioner,            
         T.C. Memo. 2001-321.  For 2002, the earned income credit is                  
         completely phased out under section 32(a) for a taxpayer with no             
         qualifying children if the taxpayer's earned income and adjusted             
         gross income is more than $5,280 (or $6,280 for married                      
         individuals filing jointly).  See sec. 32(a) and (b).                        
         Petitioner's earned income for 2002 was $14,605.                             

Page:  Previous  1  2  3  4  5  6  7  8  Next

Last modified: May 25, 2011