Samuel K. Rasco - Page 6




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               "Head of household", as relevant here, is defined as an                
          unmarried taxpayer who maintains as his home a household which              
          constitutes for more than one half of the taxable year the                  
          principal place of abode of an individual for whom the taxpayer             
          is entitled to a dependency exemption deduction under section               
          151.  See sec. 2(b)(1)(A)(ii).  A taxpayer is considered as                 
          maintaining a household only if he furnishes over half of the               
          cost of maintaining the household during the taxable year.  See             
          sec. 2(b)(1).                                                               
               Based on the record, we find that petitioner furnished over            
          half of the cost of maintaining his apartment during 1995.  We              
          further find that he meets the other requirements of section 2(b)           
          and hold that he is entitled to head of household filing status             
          for 1995.                                                                   
               The third issue for decision is whether petitioner is                  
          entitled to an earned income credit.  Petitioner claimed an                 
          earned income credit for 1995 in the amount of $2,426 with Joshua           
          and Amber listed as his qualifying children.  In the statutory              
          notice of deficiency, respondent disallowed the claimed credit.3            

          3         Respondent stated in his trial memorandum that his                
          adjustment for "recapture of the earned income credit [is]                  
          computational" based on the Court's holdings on the other issues            
          in this case.  Respondent misstates the law applicable to this              
          case.  Petitioner's entitlement to the sec. 32 earned income                
          credit for 1995 is not conditioned on petitioner's entitlement to           
          dependency exemption deductions under sec. 151 or head of                   
          household filing status under sec. 2(b).  The statutory language            
          which previously linked those issues was removed by the Omnibus             
                                                             (continued...)           




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