Internal Revenue Service
Revenue Ruling

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 Rev. Rul. 63-14

1963-1 C.B. 29

Sec. 152

IRS Headnote

A member of the United States Air Force who provided a `Class Q' allotment for his mother, who uses the amount thereof for her support and the support of the member two minor sisters, may be allowed dependency exemptions, under section 152 of the Internal Revenue Code of 1954, for his mother and his two minor sisters for whom he has furnished more than one-half the support.

Full Text

Rev. Rul. 63-14

Advice has been requested whether a member of the United States Air Force who provided a `Class Q' allotment for his mother, who used the amount thereof for her support and the support of the member's two minor sisters who live with her, may be allowed dependency exemptions for his mother and his two minor sisters, under section 152 of the Internal Revenue Code of 1954.

In 1961, the taxpayer was serving in the Air Force. He provided a `Class Q' allotment in favor of his mother, composed in part of an amount which is withheld from the pay of the member and of an amount which is paid by the Government. The mother and sisters have no income from any other source.

A member of the Air Force entitled to receive basic pay, who has dependents, is entitled to receive a basic allowance for quarters when quarters in kind are not furnished or available for him and his dependents. Before a member is entitled to a credit for basic allowance for quarters for dependents, he must have in effect an allotment of pay to his dependent, or dependents, of an amount equal to the applicable rate for basic allowance for quarters, plus his required contribution for his grade. See Career Compensation Act of 1949, 37 U.S.C. 231 and 252, and the Dependents Assistance Act of 1950, 50 U.S.C. 2201-2216.

Such an allotment must be made payable to or on behalf of a dependent, or dependents, listed on the member's dependency certificate. For allotment purposes, the term `dependent' includes a father or mother of any member of the uniformed services. See 37 U.S.C. 231(g). Allotments may be made on behalf of dependents in the following categories: wife; children; child or children in custody of a divorced wife or other custodian; and parent or parents.

Section 152 of the Code defines the term `dependent' as one of a group of listed individuals over half of whose support, for the calendar year in which the taxable year of the taxpayer begins, was received from the taxpayer. Among the individuals listed are parents and sisters of the taxpayer.

The question in the instant case arises because sisters generally are not recognized as dependents for the purpose of the allotment and the amount of the allotment is not increased due to their dependency. However, the fact that the sisters are not considered dependents for allotment purposes is not controlling for Federal income tax purposes.

In the instant case, the member alloted both the quarters allowance and the required amount of his service pay to his mother. Since the `class Q' allotment was composed in part of an amount withheld from the member's pay and in part of an amount allotted by the Government at the member's request, the entire amount may be considered to have been furnished by the member to his three dependents for Federal income tax purposes. See I.T. 4092, C.B. 1952-2, 115.

In view of the foregoing, it is held that the instant taxpayer, a member of the United States Air Force, who provided a `Class Q' allotment for his mother, who uses the amount thereof for her support and the support of the member's two minor sisters, may be allowed dependency exemptions, under section 152 of the Code, for his mother and his two minor sisters for whom he has furnished more than one-half the support.