Steed Wells - Page 4

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          1998, the Family Court of the State of New York issued an order             
          designating Ms. Kingston to be the custodial parent of Jude.  In            
          said order, petitioner was required to pay Ms. Kingston $61.40              
          per week for child support and $39.90 per week for child care               
          expenses.  The order was silent as to which parent was to claim a           
          dependency exemption for the child for Federal income tax                   
          purposes.                                                                   
               Respondent issued a notice of deficiency to petitioner                 
          pertaining to the 2001 taxable year.  The notice of deficiency              
          disallowed the dependency exemption for Jude because petitioner             
          failed to establish that he was entitled to a dependency                    
          exemption.  As a result of the disallowance of the deduction,               
          respondent further determined that petitioner was not entitled to           
          the child tax credit.                                                       
                                     Discussion                                       
               A dependency exemption generally is allowed under section              
          151(a) for each dependent of a taxpayer.  Sec. 151(a), (c)(1).              
          In general, 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 (a) who are divorced, who are separated, or who            
          live apart for at least the last 6 months of the calendar year,             
          and (b) whose child is in the custody of one or both parents for            
          more than half of the year.  Sec. 152(e)(1).  Under this rule, if           






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