Is It a Dependent or a Car
Warning! Do not try this at home! It could lead to big trouble with the IRS which could mean a hefty fine and free room and board for several years at taxpayers’ expense.
In their “Car Talk” column, Tom and Ray Magliozzi recently answered a reader’s question about whether buying the dream car the reader had wanted as a teen was still a good idea. They answered no, not if the reader wanted a daily driver. They told the reader, “Just understand that you’re not buying a car, you’re buying a dependent.”
That got me thinking. Could we claim our older cars as dependents? We don’t even have to make up a name. After all, Mercedes is a woman’s name. In fact, the car was originally named after Mercedes Jellinek. Some people, who shall remain nameless, even call their cars their “babies” or, if it’s an older car, “the old girl,” and give them names. “Betsy” seems to be popular.
But before I got carried away with my thoughts, I decided to check with a couple of tax preparers I know as to what a “dependent” is, at least in the eyes of the IRS. They are both scrupulously honest, which might be a drawback in claiming the 1960 220SE as a dependent, but I had to give it a shot. One refused to have anything to do with this project; the other said he would help as long as he remained anonymous.
He Who Shall Remain Nameless said that to qualify as a child, the alleged dependent must be your son, daughter, stepchild, adopted child, foster child, or a descendant such as a grandchild. A sibling would qualify, as would a niece or nephew.
Well, maybe I could pass the 220 off as my adopted child? No, because there are age requirements. The “child” must be under age 19 at the end of the year and younger than Ernie or me. While the 220 is younger than either of us, she is older than 19.
Children up to age 24 can be claimed if they are full-time students. Maybe “the old girl” is a full-time student. What institution of higher learning could she be attending? Do you have to prove it? Would the IRS check with the school? What would her major be – German, metallurgy, automotive engineering? But she is too old to qualify, so that’s a dead end.
With a few exceptions, such as death or kidnapping, a child must have lived with you for more than half the year. Aha, now we’re cooking. The alleged dependent has been with us for more than eight years.
To qualify as a dependent, a child must not have provided more than half of his or her own support for the year. Aha, again, that car has never earned a cent, though she has cost plenty. Still, there are more “uh-ohs” than “ahas,” so claiming the car as a dependent child isn’t going to work.
So what about claiming her as a relative? Once again, He Who Shall Remain Nameless gave me a reality check. To qualify as a member of the household, the “person” must have lived with you for a year. No problem there. The “person” must have earned less than $3,650 that year. No problem there. Documentation might be required to explain why a 50-year-old woman is unemployed. Is she disabled? Maybe we are on to something. If she’s up on blocks or on a rotisserie, she might be considered to be in traction. Those little four-wheeled roller-skate things that people put under the wheels of the car to move it around without actually starting it might pass for a wheelchair or crutches, but getting a qualified person to declare Auntie Mercedes disabled could be a problem. Actual humans have problems with this, especially if it’s a back ailment.
Could the repairs be considered medical treatments and procedures? That valve job could pass for cardiac surgery, couldn’t it? If so, then dent repair would qualify as cosmetic surgery. Would it be possible to claim the new tires as “shoes”? If so, then special tires for autocross might be orthopedic shoes.
Under the circumstances, who would be qualified to make this determination? A doctor with a strong background in automotive restoration, a good imagination, and absolutely no scruples might do. However, He Who Shall Remain Nameless pointed out that the disability has to be total and permanent. Well, so much for restoration.
We could say that we supply all her food, clothing, and shelter. Would new sheepskin seat covers qualify as a clothing expense? How about a new convertible top? After all, the old lady needs a hat. Would a garage pass for an in-law apartment?
Would gasoline, oil, coolant, and other fluids qualify as food? If you indicate how much you spend on food for “the old girl,” will it look believable in the human context? If you aren’t spending enough, would you find yourself being investigated for elder abuse? After all, if it’s a collector car, it would have to be an “elder,” wouldn’t it?
The biggest drawback, according to He Who Shall Remain Nameless, is the need for a Social Security number for Dear Aunt Mercedes. There is no way that a Vehicle Identification Number could pass for a Social Security number, Auntie can’t apply in person for a Social Security card and, to complicate things further, she has no birth certificate. That brings up the subject of citizenship. Where was she “born”? Most likely, she was born in Stuttgart, Germany. Is she a citizen? No? Well, then, does she have a green card? No, and it might be hard to get one. Deportation looms. This is too complicated. Scratch that idea.
He Who Shall Remain Nameless also pointed out that fudging on your taxes is illegal and subject to stiff penalties, so I repeat: Do not try this at home.