*80 Decision will be entered for the respondent.
Held, that the petitioner's mother did not have gross income of less than $ 600 for the year 1965 and that therefore the petitioner is not entitled, for her taxable year 1965, to a dependency exemption deduction on account of her mother under sec. 151(e), I.R.C. 1954. Held, further, that since petitioner is not entitled to a dependency exemption deduction under sec. 151(e) she does not qualify as a head of household under sec. 1(b)(2) of the Code and is therefore not entitled to the special tax rate provided by sec. 1(b)(1) of the Code for heads of households.
*1614 The respondent determined a deficiency in income tax for the taxable year 1965 in the amount of $ 267.34. The issues presented are whether the petitioner is entitled, under section 151(e) of the Internal Revenue Code of 1954, to a dependency exemption for her mother, and whether she is entitled, under section 1(b) of the Code, to the special tax rate there provided for the head of a household.
FINDINGS OF FACT
The petitioner at the time of filing her petition was a resident of New York, N.Y. She filed her income tax return for the calendar year 1965 *82 with the district director of internal revenue in the Borough of Manhattan.
During the taxable year 1965 the petitioner resided in an apartment at 1491 Metropolitan Avenue, New York City, which she rented for $ 65 per month. Her mother, Rose Carito, who was about 78 years of age, resided with her.
The petitioner's mother had previously been employed as a factory operator and was a member of local No. 10, International Ladies' Garment Workers' Union, but had retired prior to the beginning of the taxable year 1965. During such year she was entitled to a pension in the amount of $ 50 per month. Throughout that year she received each month a pension check in the amount of $ 50, except that for the month of January 1965 the check which she received was in the amount of $ 42. This resulted from the deduction and retention by the union, pursuant to her authorization, of an amount of $ 8 as a death benefit assessment. She received from the union the following explanation of the retention of $ 8:
Enclosed is your January, 1965 pension check.
In accordance with your authorization we deducted Eight ($ 8.00) Dollars for your 1965 I.L.G.W.U. Death Benefit Assessment.
Keep this card as a record*83 of the deduction for 1965.
Lo. 62-LO. 10 (I.L.G.W.U.)
Retirement Benefits Fund
*1615 The petitioner's mother also received during the year 1965 social security payments totaling approximately $ 900.
Throughout the taxable year 1965 the petitioner and her mother maintained a savings account in their joint names in the Dollar Savings Bank. All the pension and social security checks which Rose Carito received during the year 1965 were deposited in such account. All the deposits made to such account during that year belonged to petitioner's mother. During that year interest was credited to such account, and in her income tax return for the taxable year 1965 the petitioner reported interest income from such account in the amount of $ 24.89.
During the taxable year 1965 the petitioner, from her own funds, paid the rent on the apartment and also paid out of her funds all the costs of supporting her mother, including amounts paid for food, clothing, medical care, and other miscellaneous items.
In her income tax return for the taxable year 1965, the petitioner claimed a dependency exemption on account of her mother. Therein she stated that she furnished all of her mother's support*84 and reported that her mother had income of $ 600. Therein she computed her tax liability at the rate prescribed for the head of a household.
In the notice of deficiency the respondent disallowed the claimed dependency exemption deduction on the ground that the mother had gross income of $ 600 during the taxable year 1965, and determined that the petitioner did not qualify as the head of a household and was not entitled to the special tax rate provided for the head of a household.
OPINION
Section 151 of the Internal Revenue Code of 19541*85 provides for the deduction of an exemption of $ 600 for a dependent of the taxpayer whose income or the calendar year in which the taxable years of the taxpayer begins is less than $ 600. Section 152 of the Code 2 provides *1616 that the term "dependent" includes the mother of the taxpayer if over half of her support for such taxable year is received from the taxpayer.
The petitioner contends that, although she reported in her return that her mother had gross income of $ 600, she was in error in so doing, since one of the monthly pension checks was in the amount of $ 42 instead of the usual $ 50, and that in reality her mother had gross income for the taxable year 1965 of only $ 592. We think it clear, however, that since the petitioner's mother was entitled to a pension of $ 600 for the year, the full $ 600 must be considered as gross income to her. It appears that she authorized the withholding of $ 8 from the January 1965 check to satisfy a death benefit assessment. This, *86 however, did not prevent the full amount of the pension for the month of January from constituting gross income to her. In substance, the result was the same as if she had actually received the full amount of $ 50 and had then paid $ 8 thereof to meet such assessment. In addition, the evidence indicates that the petitioner's mother derived interest income during the year 1965. 3 Since the mother did not have gross income of less than $ 600, the petitioner is not entitled to a deduction for a dependency exemption on her account.
*87 Section 1(b)(2) of the Code 4 defines a head of household as an individual who maintains as his home a household which constitutes for the taxable year the principal place of abode, as a member of such household, of any person who is a dependent of the taxpayer (which would include the mother of a taxpayer), but only if the taxpayer is entitled to a deduction for the taxable year for such person under section 151. Since, as we have held above, the petitioner is not entitled to a deduction for her mother under section 151, she does not qualify as *1617 a head of household under section 1(b)(2) of the Code and is therefore not entitled to the special tax rate provided by section 1(b)(1) of the Code for heads of households.
*88 Decision will be entered for the respondent.
Footnotes
1. Sec. 151 of the Code provides in part as follows:
SEC. 151. ALLOWANCE OF DEDUCTIONS FOR PERSONAL EXEMPTIONS.
(a) Allowance of Deductions. -- In the case of an individual, the exemptions provided by this section shall be allowed as deductions in computing taxable income.
* * * *
(e) Additional Exemption for Dependents. --
(1) In general. -- An exemption of $ 600 for each dependent (as defined in section 152) --
(A) whose gross income for the calendar year in which the taxable year of the taxpayer begins is less than $ 600 * * *↩
2. Sec. 152 of the Code provides in part as follows:
SEC. 152. DEPENDENT DEFINED.
(a) General Definition. -- For purposes of this subtitle, the term "dependent" means any of the following individuals over half of whose support, for the calendar year in which the taxable year of the taxpayer begins, was received from the taxpayer (or is treated under subsection (c) or (e) as received from the taxpayer):
* * * *
(4) The father or mother of the taxpayer, or an ancestor of either * * *↩
3. The amount of the mother's interest income for the year 1965 cannot be determined precisely from the record. The petitioner testified that she reported the interest from the Dollar Savings Bank account in her own return for the taxable year 1965; and such return states the amount of such interest to be $ 24.89. She also testified that interest in the amount of $ 12.14 was credited to such account in 1965. It is therefore unclear whether the amount of $ 12.14 represents the total interest credited to such account during 1965 or only a portion of such total interest which was considered by petitioner as being attributable to her mother. Generally, the amount of interest credited on bank deposits is income to the depositor for the taxable year when credited unless such interest is not subject to withdrawal at the time credited. See sec. 1.451-2(b), Income Tax Regs.↩ Here, there is no evidence to show that there were any restrictions on the withdrawal of the interest credited.
4. Sec. 1(b)(2) of the Code provides as follows:
(2) Definition of head of household. -- For purposes of this subtitle, an individual shall be considered a head of a household if, and only if, such individual is not married at the close of his taxable year, is not a surviving spouse (as defined in section 2(b)), and either --
(A) maintains as his home a household which constitutes for such taxable year the principal place of abode, as a member of such household, of --
* * * *
(ii) any * * * person who is a dependent of the taxpayer, if the taxpayer is entitled to a deduction for the taxable year for such person under section 151↩ * * *