Interpretation of the Phrase "Living With"

1960 BIR RULING NO. 014-60 Ross, Selph & Carrascoso P. O. Box No. 781 M a n i l a Gentlemen : Reference is made to your letter dated November 19, 1959, wherein you requested for our interpretation of the phrase "living with" as used in connection with the following queries: cdll "1 May a taxpayer residing in Cebu claim the exemption provided for in sub-sections (b) and (c) with respect to children not over 23 years of age and otherwise covered by the said sub-sections notwithstanding the fact that such children stay in Manila the greater part of a taxable year for their studies? "2 May the same taxpayer, whether a citizen or a resident alien, claim exemption for children not over 23 years of age who are pursuing their studies abroad?" In reply thereto, we quote hereunder Section 23(b) and (c) of the Tax Code, as amended by Republic Act. No. 2343. "(b) Personal exemption of married persons or heads of family . The sum of three thousand pesos, if the person making the return is a married man or a married woman or the head of a family: Provided, That only one exemption of three thousand pesos shall be made from the aggregate income of both husband and wife when not legally separated. For the purpose of this section, the term 'head of family' includes an unmarried man or woman with one or both parents, or one or more brothers or sisters, or one or more legitimate, recognized natural, or adopted children living with and dependent upon him or her for their chief support where such brothers, sisters, or children are not more than twenty-three years of age, unmarried, and not gainfully employed, or where such children are incapable of self-support because mentally or physically defective. "(c) Additional exemption for dependents . The sum of one thousand pesos for each legitimate, recognized natural, or adopted child, wholly dependent upon and living with the taxpayer if such dependent are not more than twenty-three years of age, unmarried, and not gainfully employed or incapable of self-support because mentally of physically defective. The additional exemption under this subsection shall be allowed only if the person making the return is the head of the family." The afore-quoted provisions of law enumerate the circumstances which must concur before a person can validly claim personal or additional exemption or both. The law as amended emphasizes the fact that the dependents must be living with the person claiming as "head of family". This Office is nevertheless of the opinion that, in application, the said law admits of certain exceptions to what would seem as the general rule that the dependent must be living with the person giving support and this exception applies precisely to the child under the circumstances mentioned in queries (1) and (2). In the absence of continuous actual residence together, whether or not a person with dependent relatives is a head of a family within the meaning of the Internal Revenue Code must depend on the character of the separation. If a father is absent on business, or child or other dependent is away at school or on a visit, the common home being still maintained, the additional exemption applies. If, moreover, through force of circumstances a parent is obliged to maintain his dependent children with relatives or in a boarding house while he lives elsewhere, the additional exemption may still apply . . . (Vol. 5, Merten's Law of Federal Income Taxation). "Living with" the person giving support does not necessarily mean actual and physical dwelling together at all times and under all circumstances. So long as all other requirements enumerated in the law are met and the child referred to in your letter stays abroad or in a place other than that of his parents with the intention of remaining there simply as a student, and only until he finishes his studies, and for this purpose receives remittances of money for his education and all other incidental expenses from his parents, such child recipient of this actual support is for all intents and purposes of the law considered living with and actually dependent upon the said parents. This is true to both citizens and resident aliens of the Philippines. cdta Very truly yours, MELECIO R. DOMINGO Commissioner of Internal Revenue