In a divorce where there are children involved, the allocation of the annual dependency exemption for tax purposes is always discussed. The IRS has taken the position that the allocation of the exemption should go to the spouse that has custody of the child(ren). The court can, however, reallocate the exemption in a divorce proceeding. Based on the passage of the Tax Reform Act of 1997 the exemption now also has other “rights” of use […]