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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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