You may be among two or more siblings who help support an elderly parent. In some cases, no one sibling provides over 50 percent of a parent’s support test so no one can claim the dependency exemption, which provides a $3,300 tax deduction in 2006.
This problem can be solved by filing Form 2120, a Multiple Support Declaration, on one sibling’s tax return. Each sibling who signs the form must contribute at least 10 percent of the parent’s support for the year, and the total must exceed 50 percent
One approach is to take turns among the siblings who can qualify, from one year to another. However, siblings whose income is well over $150,000 ($225,000 on a joint return) should not participate; the same is true of siblings who are subject to the alternative minimum tax (AMT). Quirks in the tax code prevent such taxpayers from getting the full benefit from a dependency exemption.
