@Opus 17
I agreed with your statement above and asked specifically that when I spoke to the IRS's tax law expert. She told me that since the qualifying person was under 24 and in school, he would be treated as a qualifying child and not a qualifying relative. She said the the qualifying child rule #2 in table 5 clearly states that a person under 24 and in full time school is a qualifying child and not a relative. So in my case he could only be treated as a child. The main finding the IRS had was that if the child is considered "emancipated" or at the age of majority in the state the child resides for more than half the tax year, all the rules of divorced or separated parents do NOT apply. It also means that the "custodial parent" rule does not apply since the child is considered NOT living with either parent (if emancipated for more than half the year). So in my situation, since we both claimed the child, we had to go through the tie breaker rules. Of the 5 tie breaker rules, the first two did not apply, but the third rule was in question. Since the child was considered not living with either parent for the whole year, rule #3 did not apply either. So we go to rule #4 which I had the higher AGI, therefore could claim the dependent.
The bottom line is that if a child is at the age of majority (emancipated) in the state where they live, none of those days after count for the parent who wants to claim the dependent. It seemed very confusing to me as well, but after talking with the IRS it's actually quite simple. And it does seem that the standard rules do apply with the exception of the divorced or separated parents and custodial parent rules do not.
