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Show THI PAGE FOUR. DAILY WEDNESDAY, APRIL 18, 1973 RECORD Office of the Attorney General Opinion No. dent 73-0- 10 first 13 , 1973 April State of Utah for less than six .months in both the year and the second year. is in the host's home If the student stays six months and one day during either rear, he would then constitute a member of the taxpayer s household. and if the host family furnished more them 50 of the student's support for the entire year, the student may be claimed as .a dependent. However, if the student is not in the taxpayer's home for. more than six months during either year, or if the host family does not furnish more than 50 of the support for the entire year, then the exchange student may not be claimed as a dependent by the host family. 1 REQUESTED BY: ROBERT W. DARGER Field Service American District Representative PREPARED BY: VERNON B. ROMNEY Attorney General G. BLAINE DAVIS Assistant Attorney General tax return, the Utah State host family for foreign exchange students take a dependency deduction for the period of time in which the student is living in the family home? 1. QUESTIONS : income On may a Utah State income tax return, family for a foreign exchange student take a deduction for a charitable contribution, if the student is sponsored Therefore, it is the opinion of this office that an exchange student may not be claimed as a dependent by a host family, unless the exchange student resides in that home for more than six months during that calendar year, and unless more than 50 5f the support of the exchange student is furnished by the host family. 2? On the may a host by a Probably not. 1. CONCLUSION S : charitable organization? 2. Not for QUESTION 2 Utah Code Annotated, Section a permits deduction from net income for tions or gifts (5) (b) -5 (1953), charitable contribumade within the taxable year for the use of: " corporation or association community chest, fund or foundation, organized and operated exclusively for See opinion. 1972 and 59-14- or prior year returns. (b) trust or Any religious, charitable, scientific, literary or educational purposes, or for the prevention ANALYSIS : QUESTION of cruelty to children or animals, if no part of the net earnings inures to the benefit of any shareholder or individual." 1 Field Service and other organizations Utah State Income Tax Regulation 14-- 5 provides, in bring high school students from foreign countries to spend a school year in the united States. The normal procedure is for part, as follows: the student to live in a host home for approximately ten months, from August or September of one year until May or June of the "In connection with claims for de, ductions under this section, there shall be following year, and the student normally does not return for the host the the student's school stated in returns of income the name and adstay, year. During following and and dress of each organization to which a contrilodging, family trips, family pays for the student's food and modest farewell Any presents. possibly bution, or gift, was made and the amount of birthday, holiday, other expenses are paid by either the student's own family, or the actual payment of the contribution or gift The American in each case. Claims for deductions must be substantiated, required by the tax commission, by a statement from the organization to which the contribution or gift was made showing whether the organization is a domestic organization, the name and address of the contributor or donor, the amount of the contribution or gift and the date of the actual payment as the thereof, and by such other information " tax commission may deem necessary. (Emphasis added.) sponsoring organization. when Utah Code Annotated (1953), sets forth Section the requirements for a dependency deduction, as follows: "There shall be allowed the following credits against the net income: 59-14- -7, "(2) Six hundred dollars for each dependent person (other than husband or wife) who received his chief support from taxpayer and who is closely related by blood, marriage or adoption or is a member of his household and is not his employee and who did not have a gross income of $600 or more; ... . " (Emphasis added.) Therefore, a host family would receive the $600 deduction only if: (1) it furnished the student's chief support, (2) the student is a member of its household, and (3) the student did not earn more than $600 in the tax year. Utah State Income Tax Regulation 14-- 7, paragraph 3, states the requirement as to what is necessary for a person to furnish the students chief support. Paragraph 3 states: "Credit for each dependent person, or wife, is $600, which be claimed may only by the person Who furnished more than 50 of such dependent's support for the entire year. Dependent for the purpose of this section must be one who is closely related to the taxpayer by blood, marriage or adoption or Who is a member of the taxpayer's household and is not an employee. (Emphasis added.) other member them husband The Regulation goes on to describe of the taxpayer's household: What this section 'member of the taxpayer's household' will mean a person who is maintained as a family member for a period in excess of six months of the taxpayer's taxable 50 (Emphasis added.) On to deduct as a charitable contribution his unreimbursed expenditures which were spent to maintain an elementary or high school student in his home under a program sponsored by a charitable organization, which provides educational opportunities for students. That provision of the Internal Revenue deduction of $50 per month, if the hone under a written agreement with the organization. However, no such provision, or anything similar, has been enacted by the Utah State Legislature. Code specifically permits student is present in the a further item which should be mentioned is that the 1973 Legislature, by enacting Senate Bill 29, has made this question moot for all taxable years, beginning after DeOne cember 31, 1972, by providing for an income tax based on income as determined for Federal purposes. Since such a charitable contribution is permitted for purposes of the Federal income tax return for 1973 and all subsequent years, the charitable contribution will, in effect, be permitted for the present and future years. This opinion will only affect taxable years which be- Therefore, it is the opinion of this office that a charitable contribution may not be deducted on the Utah State income tax return for 1972 and prior- years for expenses paid - in keeping a foreign exchange student who is sponsored by a charitable organization, but such deduction will be permitted for 1973 and future years' returns because it is permitted by Federal law. Respectfully submitted, test. Since the exchange student stays with the host family one for only school year, neither of these tests is met. Normally, a student arrives in August or September of the first year and Marvh Putnam Jr. 25 ') E. 300 N. Renter VERNON Jack L. Nielsen 250 S. Owner 232 E. On 404 : Kevin Brad Machley W. 325 S. Owner B. ROMNEY Attorney General of the State of Utah On On made stu- the Federal income tax, I.R.C., Section 170 (h) , has been specifically enacted by Congress to permit a taxpayer dent. critical requirements for a host family are the of support" test and the "in excess of six months of the taxpayer's taxable year" that the charitable contribution should be directly to the organization rather than to the individual The over does indicate not clearly so state, but constitutes a gan prior to December 31, 1972. "For the purposes of year." it The above Regulation does ; Off Barbara D.Leeper 25 , W, 267 S. $B-- 3 Renter Off Elvin Hovey 23 S. 300 W. Renter' Off Dennis Holland 395 S. 100 W, Renter |