Thank you for the clarification, Howard1948. Please ensure we understand correctly:
The situation I am referring to above is, as you say, where the custodial parent transfers the dependency exemption (via agreement) to the noncustodial parent. This is what allows the split of tax benefits. I have edited my answer above such that it now calls this transfer out as necessary.
You are saying, though, that the custodial parent cannot allow the other to claim the child if both parents reside in the same household? What allows for the dependency exemption transfer, then? The two parents must live in different households?
The 1040 filing instructions say this, in part:
<begin excerpt>
"A child will be treated as the qualifying child or qualifying relative of his or her noncustodial parent (defined later) if all of the following conditions apply:
1. The parents are divorced, legally separated, separated under a written separation agreement, or lived apart at all times during the last 6 months of 2016 (whether or not they are or were married)."
</end excerpt>
The wording of this requirement (1) is vague, as it seems to allow for a written "separation" agreement to be in place where the parents can still live together. Is this correct? A separation agreement with the parents still living together appears to allow the custodial parent to allow the noncustodial parent to claim the dependent, all while both parents still live together in the same household. Is this correct, or does "separated under a written separation agreement" imply that the parents must have once been married, and are no longer living together?
