Relationship Test

Definition of 'Relationship Test'


One of several tests that a person must pass in order to be claimed as a dependent on someone else's tax return. The relationship test has several criteria, and as long as any one of them is met, the person in question is eligible to be claimed as a dependent by another. The relationship test mandates that the person in question must be either a lineal descendant or ancestor, sibling, in-law, niece, nephew, aunt, uncle or anyone other than the taxpayer's spouse who lived in the taxpayer's household during the entire year.

There is a separate relationship test to see if someone is a qualifying child (see below).

Investopedia explains 'Relationship Test'


The relationship test for a qualifying child mandates that the child be the taxpayer's child, stepchild, foster child, adopted child or any descendant thereof. Children who meet the criteria allow the taxpayer claiming them to receive their dependency exemptions. This test is one of four tests that a child must pass in order to be considered a qualifying child. The others are residence, age and support tests.


Filed Under: ,

comments powered by Disqus
Hot Definitions
  1. National Best Bid and Offer - NBBO

    A term applying to the SEC requirement that brokers must guarantee customers the best available ask price when they buy securities and the best available bid price when they sell securities.
  2. Maintenance Margin

    The minimum amount of equity that must be maintained in a margin account. In the context of the NYSE and FINRA, after an investor has bought securities on margin, the minimum required level of margin is 25% of the total market value of the securities in the margin account.
  3. Leased Bank Guarantee

    A bank guarantee that is leased to a third party for a specific fee. The issuing bank will conduct due diligence on the creditworthiness of the customer looking to secure a bank guarantee, then lease a guarantee to that customer for a set amount of money and over a set period of time, typically less than two years.
  4. Degree Of Financial Leverage - DFL

    A ratio that measures the sensitivity of a company’s earnings per share (EPS) to fluctuations in its operating income, as a result of changes in its capital structure. Degree of Financial Leverage (DFL) measures the percentage change in EPS for a unit change in earnings before interest and taxes (EBIT).
  5. Jeff Bezos

    Self-made billionaire Jeff Bezos is famous for founding online retail giant Amazon.com.
  6. Re-fracking

    Re-fracking is the practice of returning to older wells that had been fracked in the recent past to capitalize on newer, more effective extraction technology. Re-fracking can be effective on especially tight oil deposits – where the shale products low yields – to extend their productivity.
Trading Center