William A. Carcieri, Jr. - Page 5




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               The terms of the most recent divorce decree or subsequent              
          custody decree determine who has "custody" for purposes of                  
          section 152(e).  Sec. 1.152-4(b), Income Tax Regs.  Where parents           
          have joint custody under the divorce decree, the regulations                
          further provide that custody "will be deemed to be with the                 
          parent who, as between both parents, has the physical custody of            
          the child for the greater portion of the calendar year."  Id.               
          “For a parent to be considered as having ‘physical custody’, the            
          child, generally, must reside with the parent.”  Condello v.                
          Commissioner, T.C. Memo. 1998-333 (citing White v. Commissioner,            
          T.C. Memo. 1996-438;  Whitaker v. Commissioner, T.C. Memo. 1988-            
          418).  Section 152(e)(2) provides that the custodial parent may             
          waive the right to claim the dependency exemption deduction,                
          allowing the noncustodial parent to claim the dependency                    
          exemption deduction on his Federal income tax return.  In this              
          case, however, both parents claimed a dependency exemption                  
          deduction on their 1998 Federal income tax returns.                         
               The factual dispute revolves around whether petitioner or              
          Ms. Macera had custody of Amanda for a greater portion of the               
          calendar year 1998.  Petitioner testified that he and Ms. Macera            
          had shared custody of Amanda in 1998, but that Amanda lived with            
          him from January 1 until the “middle of June” 1998.  Petitioner,            
          however, testified that Amanda stayed with him only “Monday,                
          Tuesday, Wednesday of one week, and * * * Thursday, Friday,                 
          Saturday, Sunday of the next week.”  Petitioner testified that              





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