If you and your siblings join forces to support an elderly parent, none of you may be able to claim a dependency exemption. That would be true if no one sibling provides over 50 percent of the parent’s support.
In such situations, you and your siblings can agree to file Form 2120, a Multiple Support Declaration, on your tax return. Each signer must contribute at least 10 percent of the parent’s support for the year, and the total must exceed 50 percent. In addition, the parent’s income can’t exceed the dependency exemption amount: $3,200 in 2005.
Assuming those conditions are met, the siblings can agree that one brother or sister will take the dependency exemption in a given year, and take a tax deduction. The next year, another sibling may claim it, by agreement. However, a sibling with income over $220,000 should not be included in the rotation because he or she will get little or no tax benefit, because of a phaseout of the dependency deduction.