Ex-wife and I agreed per msa to alternate claiming our daughter. though we have 50/50 custody, do I claim her for the entire 12 months or do I just claim 6-7 months

[RichardK]

For each year only one person can claim the exemption for a qualifying child (and other related benefits) and it is for the entire year. The IRS requires the person claiming the exemption to meet four tests:

1.       Relation

2.       Residency

3.       Age

4.       Support

There are special rules for divorced couples, that allow the non-custodial parent to claim the dependency exemption .

[RichardK]

In TurboTax, you should answer the questions honestly, if the qualifying child lived with you for 7 months that is what you should select.
As noted in the answer below, the custodial parent is allowed to claim the qualifying child and related benefits, however the custodial parent can sign a form 8332, to transfers the exemption and child tax credit to the non-custodial parent.
Per IRS publication 17 - The custodial parent is the parent with whom the child lived for the greater number of nights during the year.  If the child lived with each parent for an equal number of nights during the year, the custodial parent is the parent with the higher adjusted gross income (AGI).

[macuser_22]

There is no such thing in the Federal tax law as 50/50, split, or joint custody. The IRS only recognizes physical custody (which parent the child lived with the greater part, but over half, of the tax year. That parent is the custodial parent; the other parent is the noncustodial parent.)

Who can claim the exemption and credits depends on who is the custodial parent. (By the IRS definition of custodial parent for tax purposes - this is not the same as the custody that a court might grant.).

The test that the IRS uses to determine the custodial parent is where the child lived for more than 1/2 (or greater part) of the year. The IRS will go so far as to require counting the nights spend in each household - that person is the custodial parent for tax purposes (if exactly equal and more than 183 days - The custodial parent is the parent with the highest AGI, if less than 183 days then neither parent has custody). And yes they are that picky.
See Custodial parent and noncustodial parent  under the residency test in Pub 17
https://www.irs.gov/publications/p17/ch03.html#en_US_2016_publink1000170897

Only the Custodial parent can claim: (Child would be listed as non-dependent EIC & CC only)
-Head of Household
-Earned Income Credit
-Child Care Credit

The non custodial parent can only claim: (Child would be listed as dependent)
-The Exemption
- The Child Tax Credit

See Special rule to divorced or separated parents (or parents who live apart).
https://www.irs.gov/publications/p17/ch03.html#en_US_2016_publink1000170897

But only if specifically specified in a pre-2009 divorce decree, separation agreement or the custodial spouse releases the exemption with a signed 8332 form - after 2009 the IRS only accepts a signed 8332 form that must be attached to the non-custodial parents tax return.

Note. If you are filing your return electronically, you must file Form 8332 with Form 8453, (U.S. Individual Income Tax Transmittal) for an IRS e-file Return. See Form 8453 and its instructions for more details. This must be done within 3 days of your e-filed return being accepted by the IRS.

This does NOT mean that the custodial parent can ignore any Decree or court order allowing the non-custodial parent to claim the exemption - they can be required to issue the 8332 form. They could be required by the court to do so or be in contempt.

See “Children of divorced or separated parents or parents who live apart” in IRS Pub 17 for full information.
https://www.irs.gov/publications/p17/ch03.html#en_US_2016_publink1000170897

Form 8332 rules:
Attach this form or similar statement to your tax return for each year you claim the exemption for your child. You can claim the exemption only if the other dependency tests in your tax return instruction booklet are met.

Note. If you are filing your return electronically, you must file Form 8332 with Form 8453, (U.S. Individual Income Tax Transmittal for an IRS e-file Return). See Form 8453 and its instructions for more details.

This must be done within 3 days of your e-filed return being accepted by the IRS.
http://www.irs.gov/pub/irs-pdf/f8453.pdf