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A couple decides in April that they will divorce, and goes about establishing separate residences. There are three children. The plan is to have joint legal custody, with the kids alternating weeks between homes. Assuming that the separate residences get established before the end of May, what I think I see in this fact pattern is:

- The kids will live for more than half the year with each parent.
- The kids will live an equal amount of time with each parent.
- The parents will live apart for the last half of 2008.

It appears to me that in this situation, rather than living with MFS (or single, if the divorce is final by 12/31/08), this couple might be able to each file as HoH if they can agree about who gets which kids for filing purposes. If I understand the facts and am reading Pub 17 correctly, the kids would be qualifying children of both parents, live an equal amount of time with each parent, and the IRS tie-breaker would give the tax benefits to the parent with the higher AGI.

If this couple agrees that they should arrange finances so that both of them can legitimately file as HoH, what should they do? Is is possible for one parent to get all three exemptions for the kids but still have the other parent use at least one kid to establish HoH filing status?

Disclaimer: My understanding is that non-tax concerns are driving the major decisions in this situation. While both parents are concerned about doing the best thing for the kids, it's not clear to me how far their ability to work together extends. It is possible that I could be asked some tax-related questions, and I'd like to be prepared. My plan if not asked is to keep my mouth shut.

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