Norma K. Litton - Page 11

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          physical custody of them for the weekend.  Furthermore, Mr.                 
          Litton testified that during the summer and other breaks when the           
          children did not have school on Monday, the children frequently             
          spent Sunday night with petitioner.                                         
               The record establishes that the children spent 167 non-                
          Sunday nights with petitioner and sufficiently more than half of            
          the 28 Sunday nights for such weekends that petitioner had                  
          physical custody of them to constitute more than half of the 365            
          nights of the year.  On balance, and in light of the facts and              
          circumstances of this case, we conclude that the children spent             
          more than 50 percent of the time with petitioner.  Therefore, we            
          hold under section 152(e)(1) that petitioner had physical custody           
          of the children for the greater portion of 2003.  Accordingly,              
          petitioner is entitled to dependency exemption deductions for her           
          son and daughter in the taxable year 2003.9  Respondent’s                   
          determination on this issue is not sustained.                               

               9  At trial, petitioner and Mr. Litton appeared to have a              
          civil relationship, and they seemed to cooperate well in respect            
          to deviating from the Standard Possession Order in the best                 
          interests of the children.  For future years, the parties                   
          appeared to entertain the notion of properly completing and                 
          executing a Form 8332 releasing one’s claim to the dependency               
          exemptions and perhaps to alternate every year, or to split the             
          dependency exemption deductions evenly between each parent each             
          year.  If the respective party were to attach such form to his or           
          her return, then, at least for the taxable year or years subject            
          to such form, the parties might succeed in avoiding the issues              
          that have arisen in the present case.  Otherwise, we foresee that           
          respondent may disallow the dependency exemption deductions to              
          both petitioner and Mr. Litton and require both of them to file             
          petitions in this Court for a determination of who had custody              
          for the greater portion of a particular taxable year.                       

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Last modified: May 25, 2011