Rev. Rul. 84-89

ISSUE

Whether a foster child who is a dependent of a taxpayer qualifies the taxpayer for head of household filing rates under section 1(b) of the Internal Revenue Code.

FACTS

During 1983, A maintained as A 's principal place of abode a household consisting of A and A 's foster child. A provided over half the cost of maintaining such household and over half the cost of the support of the foster child during 1983. A was neither married nor a surviving spouse (as defined in section 2(a) of the Code) at the close of A 's taxable year.

LAW AND ANALYSIS

Section 2(b)(1)(A) of the Code provides, in part, that an individual may qualify for head of household filing rates under section 1(b) if such individual is not married at the close of that individual's taxable year, is not a surviving spouse (as defined in section 2(a)) and maintains as the individual's home a household that constitutes for such taxable year the principal place of abode, as a member of such household, of:

(i) a son, stepson, daughter, or stepdaughter of the taxpayer, or a descendant of a son or daughter of the taxpayer, but if such son, stepson, daughter, stepdaughter, or descendant is married at the close of the taxable year, only if the taxpayer is entitled to a deduction for the taxable year for such person under section 151, or

(ii) any other person who is a dependent of the taxpayer, if the taxpayer is entitled to a deduction for the taxable year for such person under section 151.

However, Section 2(b)(3)(B)(i) of the Code provides, in part, that a taxpayer shall not be considered to be a head of household by reason of an individual who would not be a dependent for the taxable year but for paragraph (9) of section 152(a).

Section 152(a) of the Code provides that the term "dependent" means any individual described in paragraphs (1) through (9) of section 152(a) and over half of whose support, for the calendar year in which the taxable year of a taxpayer begins, was received from the taxpayer. Section 152(a)(9) generally describes a class of unrelated persons that includes a foster child and provides that an individual (other than an individual who at any time during the taxable year was the spouse of the taxpayer) who, for the taxable year of the taxpayer, has as that individual's principal place of abode the home of the taxpayer and is a member of the taxpayer's household, shall be considered a dependent of the taxpayer.

However, section 152(b)(2) of the Code provides, in part, for purposes of that section, that in determining whether any of the relationships specified in section 152(a) exist, a foster child of an individual (if such child satisfies the requirements of section 152(a)(9) with respect to such individual), shall be treated as a child of such individual by blood. Further, section 1.151-3(a) of the Income Tax Regulations provides that for purposes of section 151(e), 152, and the regulations thereunder, a child is defined to include a foster child of the taxpayer.

Because a foster child is treated the same as a person described in section 152(a)(1) of the Code, i.e., a dependent son or daughter, it cannot be concluded that a foster child would not be a dependent of the taxpayer but for section 152(a)(9). Thus, section 2(b)(3)(B)(i) does not disqualify a taxpayer for head of household status on account of a dependent foster child. Rather, a dependent foster child does qualify a taxpayer for head of household status under section 2(b)(1)(A)(ii) of the Code.

HOLDING

Because the foster child is a dependent of A, A qualifies for head of household status under section 2(b)(1)(A)(ii) of the Code. However, if the foster child were not a dependent of A, A would not qualify for head of household status since there is no provision comparable to section 152(b)(2) that would qualify A for head of household status under section 2(b)(1)(A)(i).