William Allen Gilbert - Page 4

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          Alexis never resided in Colorado during that year.  Petitioner              
          earned $10,078 in wage income during 1998.                                  
               Petitioner filed a Federal income tax return for taxable               
          year 1998.  On this return, he claimed a dependency exemption               
          deduction for Alexis, he claimed head of household filing status,           
          and he claimed an earned income credit with Alexis as a                     
          qualifying child.  Petitioner’s return stated that Alexis lived             
          with petitioner for 12 months during 1998.  In the statutory                
          notice of deficiency, respondent disallowed the dependency                  
          exemption deduction, changed petitioner’s filing status to                  
          single, and disallowed in full the earned income credit.                    
               The first issue for decision is whether petitioner is                  
          entitled to a dependency exemption deduction for his daughter.  A           
          deduction generally is allowed under section 151(a) for each                
          dependent of a taxpayer.  Sec. 151(a), (c)(1).  Subject to                  
          exceptions and limitations not applicable here, a child of a                
          taxpayer is a dependent of the taxpayer only if the taxpayer                
          provides over half of the child’s support for the taxable year.             
          Sec. 152(a).  A special rule applies to taxpayer-parents who are            
          divorced, who are separated, or who live apart from their spouses           
          for at least the last 6 months of the calendar year, but who have           
          custody of the child for more than half of the year.  Sec.                  
          152(e)(1).  Under this rule, the parent with custody of the child           
          for the greater portion of the year (the “custodial parent”)                

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