The rules for claiming a child as a dependent can be complex, especially in a factual situation such as you describe. Generally the dependency exemption will go to the parent who has primary custody of the child for the calendar year. That sounds like the mother and her father, in this case. It would be best to reach an agreement with them, if possible. If you cannot agree with the mother and her father, there are complex tie breaking rules. You should consult with a good CPA.
Answered on Jan 03rd, 2011 at 3:28 PM