Siblings sharing support
Sometimes you don't have to shoulder the load alone. Many adult children get help from siblings in caring for mom and dad.Not only does this help maintain your day-to-day bank balance, it also spreads out any tax breaks. Where none of you solely pays for half of a parent's support, but each contributes at least 10 percent toward parental care, take a look at the IRS' multiple-support declaration. This form helps you account for the tax implications of a shared-care arrangement.
Roth offers this example: Mom is in a nursing home. Her Social Security covers 40 percent of the facility's costs, and you and your two brothers split the remainder, each paying 20 percent. Because more than half of her support comes from her three kids, she can be claimed as a dependent -- but by only one of you. That choice is left to you and your brothers.
After you and your brothers agree that you can claim mom as a dependent this tax year, file Form 2120, Multiple Support Declaration, with your tax return. This form indicates that while several siblings contributed to mom's support, the others waive any tax-exemption claim.
You also need to get signed statements from your brothers acknowledging they waived their tax claims. You don't have to send these documents with your 1040, but keep them in your records in case the IRS ever questions your exemption or medical deduction claims.
And the best news about a multiple support agreement is that it's not permanent.
"You can rotate it around from tax year to tax year," says Roth. "The next year, another sibling takes the responsibility and the third brother the next year. It softens the blow, but it's not going to cover all that it's going to cost you."
« Back to the Tax Exemptions page.