Marion Kline was recently elected mayor of a large midwestern city that furnishes its mayor with an official residence for occupancy during the term of office. The residence (house and gardens) is owned and maintained by the city, and the mayor doesn?t pay any rent. Marion and her family are required to live in the residence so that she can carry out the many social and ceremonial obligations of her office. Many of these obligations occur in the evenings and on weekends. The fair rental value of the mayoral residence is $60,000 annually. Must Marion recognize the value of her employer-provided housing as taxable compensation?

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1. Facts: Tim Loker has no family relationship to the Bryants family. Tim Loker is five years old, which is under 18. Tim Loker became a member of the Bryants household since August 12 of this year, which means by the end of this year, Tim will have been in the household for less than 5 months. Bryants family provided 100% of Tim's financial support, and intend to raise Tim as their kid. 2. Issues: Can Tim Loker be defined as a dependent of Bryants family? Is the financial support to Tim be able to exempt from Bryants family's tax return? 3. Rules of Law In this case, Tim and the Bryants family has no family relationship. Based on the Section 152(d) (2)(H), Tim does not qualify to be treated as the Bryants family relative not unless he shares the same principal place of abode both as the taxpayer as well as a member of the taxpayer's household\" for the current taxable year (Legal Information Institute 1992). In addition, Reg Section 1. 152-1 (b) indicates that Tim Loker should have been a member of the Bryants family for the entire year apart from a consideration of a temporary absence because of special circumstance. 4. Conclusion and Recommendations The provided regulation concludes that the lack of more than 6 months is not regarded as temporary. In this case, Tim has been with the Bryant family for less than 5 months thus he misses an exact of 7 months to complete a full year with the family. In conclusion, Tim cannot be considered as a relative to the Bryants household and thus Bryants family is not objective to claim Tim as their dependent on their current year's tax returns. Bryants family must wait for the following year to include the financial support in their tax return. 5. Positions you would consider taking/ areas you would like to analyze in more depth if you had more time In this case, Tim Loker can be placed under adopted child with special needs category in under Section 23(d)(3). The term \"child with special needs\" means any child if such State has determined that there exists with respect to the child a specific factor or condition because of which it is reasonable to conclude that such child cannot be placed with adoptive parents without providing adoption assistance, and such child is a citizen or resident of the United States (as defined in section 217(h)(3)). According to Section 23(a)(3), The Bryants family shall be treated as having paid during such year qualified adoption expenses with respect to such adoption in an amount equal to the excess (if any) of $10,000 over the aggregate qualified adoption expenses actually paid or incurred by the taxpayer with respect to such adoption during such taxable year and all prior taxable years