                  T.C. Summary Opinion 2010-46



                      UNITED STATES TAX COURT



        NASSER AND BASHERA KURAIN GHALEB, Petitioners v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 9496-08S.               Filed April 14, 2010.



     Nasser and Bashera Kurain Ghaleb, pro sese.

     Orsolya Kun, for respondent.



     GOLDBERG, Special Trial Judge:   This case was heard pursuant

to the provisions of section 7463 of the Internal Revenue Code in

effect at the time the petition was filed.   Pursuant to section

7463(b), the decision to be entered is not reviewable by any

other court, and this opinion shall not be treated as precedent

for any other case.   Unless otherwise indicated, subsequent

section references are to the Internal Revenue Code (Code) in
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effect for the year in issue, and all Rule references are to the

Tax Court Rules of Practice and Procedure.

     Respondent determined a deficiency of $5,475 in petitioners’

2006 Federal income tax.    After a concession,1 the issues for

decision are whether petitioners are entitled to:     (1) Four

dependency exemption deductions and (2) a child tax credit.

                             Background

     Some of the facts have been stipulated and are so found.

The stipulation of facts and the attached exhibits are

incorporated herein by this reference.    Petitioners resided in

New York State when they filed their petition.

     Nasser Ghaleb (petitioner) worked as a controller for

Guidance Center, a nonprofit organization, earning $64,852 in

2006.    Petitioner’s wife lived in Yemen, and had not yet moved to

the United States because of her pending immigration status.

     Petitioner’s sister is Thuraya Ghaleb (Ms. Ghaleb), born in

1979.    Ms. Ghaleb has three boys (petitioner’s nephews):   H.A.M.

born in 1999, M.A.M. born in 2001, and K.A.M. born in 2002.2       Ms.

Ghaleb’s husband abandoned her in the summer of 2004, leaving her

solely responsible for the care of their three children.     Ms.


     1
      Petitioners stipulated they are not entitled to a
dependency exemption deduction for 2006 for Mohamed Ghaleb,
petitioner’s brother, which was one of the five dependency
exemption deductions that petitioners claimed on their 2006 joint
Federal income tax return.
     2
        The Court redacts the names of minors.   See Rule 27(a)(3).
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Ghaleb was unemployed and unable to support herself and her

children.   Rather than having Ms. Ghaleb return to Yemen with the

children, petitioner and his father rented an apartment where Ms.

Ghaleb and petitioner’s nephews resided.

     In December 2005 petitioner purchased a two-bedroom

condominium.   In January 2006 Ms. Ghaleb and her three sons moved

into petitioner’s condominium, living there with petitioner

through October 2006.   During this period petitioner paid for the

condominium mortgage, fees, property taxes, utilities, his

sister’s transportation needs, and the other necessities of his

extended family.

     Although Ms. Ghaleb had separated from her husband in 2004,

the couple remained married and eventually reconciled in late

2006.   In November 2006 Ms. Ghaleb and her children moved to

Tennessee to rejoin her husband.

     Petitioners timely filed a joint Federal income tax return

for 2006 claiming dependency exemptions deductions for five

individuals:   (1) One for Ms. Ghaleb; (2) three for the nephews;

and (3) one for petitioner’s brother, Mohamed Ghaleb.

Petitioners also claimed a child tax credit of $3,000, consisting

of a $1,000 credit for each of the three nephews.   Ms. Ghaleb and

her husband also filed a 2006 joint Federal income tax return

claiming the same three children as dependents.   Respondent

disallowed all five of petitioners’ dependency exemption
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deductions and disallowed petitioners’ entire $3,000 child tax

credit.

                                Discussion

I.    Petitioners’ Contention

       Petitioners’ main contention is that for 2006 they are

entitled to four dependency exemption deductions and the child

tax credit totaling $3,000 because for the first 10 months of

2006 they housed petitioner’s sister and her three children and

provided almost all of their relatives’ support.

II.    Dependency Exemption Deductions

       Deductions, including dependency exemption deductions, are a

matter of legislative grace, and taxpayers have the burden of

satisfying the statutory requirements for claiming the

deductions.    Rule 142(a)(1); INDOPCO, Inc. v. Commissioner, 503

U.S. 79, 84 (1992); New Colonial Ice Co. v. Helvering, 292 U.S.

435, 440 (1934).

       A taxpayer may claim a dependency exemption deduction for

each individual who is a dependent (as defined in section 152) of

the taxpayer for the year.      Sec. 151(a), (c).   Section 152(a)

defines the term “dependent” to mean either a “qualifying child”

or a “qualifying relative”.      However, section 152(b) lists

specific circumstances rendering individuals ineligible who would

otherwise qualify as dependents.
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     We will first discuss petitioner’s nephews.      The definition

relevant here is the one for a qualifying child, which requires

that the individual:   (1) Bear a relationship to the taxpayer as

described in section 152(c)(2); (2) have the same principal place

of abode as the taxpayer for more than one-half of the taxable

year; (3) meet the age requirements in section 152(c)(3)

specifying an individual under the age of 19, or under age 24 if

the individual is a student at the close of the year; and (4)

have not provided over one-half of his or her own support for the

year.   Sec. 152(c)(1).   Notwithstanding these requirements, if

two or more taxpayers can claim the individual as a qualifying

child, the child’s parents have first priority in claiming the

individual as a dependent.    Sec. 152(c)(4)(A)(i).

     Petitioner’s nephews meet the above four requirements of

section 152(c) as qualifying children because they:     Satisfied

the relationship definition; were minors at December 31, 2006;

resided with petitioner for more than one-half of the year; and

clearly as young children did not provide more than one-half, or

any of their own support.    However, Ms. Ghaleb and her husband

claimed the three children as dependents on their joint Federal

income tax return for 2006.    Consequently, because of the

priority rule that section 152(c)(4)(A)(i) imposes, the parents’

claim supersedes petitioners’ claim to the boys as dependents.
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Therefore, petitioners are not entitled to dependency exemption

deductions for any of the three nephews.

     We now discuss whether petitioners may claim a dependency

exemption deduction for Ms. Ghaleb.    Ms. Ghaleb does not meet the

definition of a qualifying child because in 2006 she became age

27, which exceeds the age limits set by section 152(c)(1)(C) and

(3)(A).   Regarding the requirements for a qualifying relative, as

applicable here, the Code defines a qualifying relative as an

individual:   (1) Who bears a relationship to the taxpayer as

described in section 152(d)(2); (2) whose gross income for the

year is less than the exemption amount defined in section 151(d);

(3) who receives over one-half of his or her support from the

taxpayer for the year at issue; and (4) who is not a qualifying

child of the taxpayer or of any other taxpayer for the taxable

year.   Sec. 152(d)(1).

     Thus, Ms. Ghaleb satisfies the above requirements for a

qualifying relative because she met the relationship definition,

had little or no gross income for the year, received over

one-half of her support from petitioner during 2006, and was not

a qualifying child.   See sec. 152(d).   However, Ms. Ghaleb filed

a joint Federal income tax return for 2006 with her husband.    The

Code specifically provides that a person who files a joint return

with their spouse is ineligible to be claimed as a dependent.

Sec. 152(b)(2).   Because of this statutory prohibition,
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petitioners may not claim a dependency exemption deduction for

Ms. Ghaleb for 2006.

III.    Child Tax Credit

       Subject to an adjusted gross income ceiling, a taxpayer is

entitled to a $1,000 credit against tax for each qualifying

child.    Sec. 24(a).   For purposes of this section, a qualifying

child means an individual under age 17 who is a qualifying child

of the taxpayer as defined in section 152(c).    See sec. 24(c)(1).

As discussed above, petitioner’s nephews are the qualifying

children of their parents, Ms. Ghaleb and her husband, and are

not the qualifying children of petitioners.    Therefore, because

petitioners did not have any qualifying children in 2006, they

are not entitled to a child tax credit.

IV.    Summary

       We commend petitioners’ generosity in supporting

petitioner’s sister and her three children.    However, for the

reasons stated above, specific Code provisions prevent

petitioners from claiming any dependency exemption deductions or

any child tax credits for these relatives for 2006.

       We have considered all of the other arguments made by the

parties, and, to the extent that we have not specifically

addressed them, we conclude that those arguments are without

merit, irrelevant, or moot.
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To reflect our disposition of the issues,


                                      Decision will be entered

                                 for respondent.
