Donnell Floyd - Page 5

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          hair stylist and group counselor.  Ms. Floyd also provided                  
          clothing and other items for the children and paid medical                  
          expenses for them.                                                          
               Petitioner alleges he and Ms. Floyd reached an oral                    
          agreement that each of them would claim one dependency exemption            
          on their income tax returns for 1998.  Ms. Floyd would claim the            
          exemption for their daughter, Dawnielle, and petitioner would               
          claim the exemption for their son, Donnell II.  Ms. Floyd denied            
          such an agreement, and no written document or agreement to that             
          effect was offered into evidence.                                           
               Petitioner’s adjusted gross income was $10,608 for 1998.  On           
          his 1998 return, petitioner claimed head-of-household filing                
          status, a dependency exemption deduction for his son, Donnell II,           
          and an earned income credit of $2,271, with Donnell II reported             
          as the qualifying child.  Petitioner did not claim a dependency             
          exemption for his daughter, Dawnielle.  On her 1998 return, Ms.             
          Floyd claimed dependency exemption deductions for both children.            
               In the notice of deficiency, respondent determined                     
          petitioner’s filing status as married filing separately.  In                
          addition, respondent disallowed petitioner’s dependency exemption           
          for his son and disallowed the claimed earned income credit.                
               The first issue for decision is whether petitioner is                  
          entitled to the dependency exemption deduction for his son.                 
          Section 151(c) allows taxpayers to deduct an annual exemption               

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