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From: dave@lsuc.UUCP (David Sherman)
Newsgroups: net.taxes
Subject: Re: Dependents - New Rules for 1985 Income tax
Message-ID: <1037@lsuc.UUCP>
Date: Thu, 16-Jan-86 14:09:59 EST
Article-I.D.: lsuc.1037
Posted: Thu Jan 16 14:09:59 1986
Date-Received: Thu, 16-Jan-86 16:21:55 EST
References: <428@faron.UUCP>
Reply-To: dave@lsuc.UUCP (David Sherman)
Distribution: net.taxes
Organization: Law Society of Upper Canada, Toronto
Lines: 31
Keywords: non-custodial parents
Summary: to prevent multi-claiming?

From: wdh@faron.UUCP (Dale Hall)
> Does anyone out there have any idea why the 1985 Federal Income Tax rules
> have eliminated the exemption for children of a non-custodial parent? Earlier
> rules stipulated that the parent who provided the bulk of financial support 
> (via child support, not alimony) was entitled to claim the child as a
> dependent. This year, this is allowed only if one of the following two
> conditions is met: (i) the custodial parent waives all rights to such an
> exemption (via some official IRS form which must be filed with the 1040 of
> the non-custodial parent), or (ii) the divorce decree (pre - 1985)
> specifically stated that the non-custodial parent shall retain the
> dependency exemption. 

Although I'm not familiar with U.S. tax policy, this sounds like
quite a reasonable anti-avoidance provision to me, and is effectively
the same as the limitation in s.109(4) of the Income Tax Act (Canada).
If the spouses are separated or divorced, both might try to claim
the deduction otherwise. Denying it by statute to the non-custodial
parent unless otherwise agreed is reasonable. Note that the intention
is not, as suggested, to "punish those who support their children
after divorce", but to make sure that the issue is addressed in
the settlement between the parties, whether that be by contract
or court order. In theory, at least, the issue of who gets to
claim an exemption for the children is just one of the issues
on the bargaining table (or at litigation), along with custody,
the house and who gets the pet budgie.

Dave Sherman (just another tax lawyer...)
The Law Society of Upper Canada
Toronto
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{ ihnp4!utzoo  pesnta  utcs  hcr  decvax!utcsri  } !lsuc!dave