Divorce/ Exemption / Head of Household?

What is the name of your state? CA

I am preparing my friends taxes. He is not legally divorced but has not lived with his ex for four (4) years. He has two children, both under 18.

His ex will sign the Release of Claim to Exemption (form 8332) for one child.

My question is: Can he file Head of Household and claim an exemption as well? I am preparing the taxes on-line. Everytime I enter the child's name as the dependent - Quicken gives me an error message stating that the dependent cannot be the same as the qualifying person for Head of Household. If I select the option that "the qualifying person lives with you" - it seems to take it. If I put that the child lives with him - will the IRS want proof?

When filing HOH - isn't the qualifying person technically a dependent? I have read the IRS Pub. 501 but I still am not clear. Please help.

If the children live with him, he files HH & claims both of them unless there is a separation agreement that gives the mother the right to claim the kids. If the kids do not live with him, he must file MFS and may claim the kids as dependents if their mother signs the 8332. He may itemize deductions if he likes without preventing his wife from claiming the standard deduction for head of household.

Since he and his ex have lived seperately for four years, can't they both claim HOH? IRS Publication 501 states that "you are considered unmarried if you meet all fo the following:

1. File seperate return;
2. Paid more than 1/2 the cost of upkeep of home;
3. Spouse did not live in your home;
4. Your home was the main home of your child;
5. You must be able to claim an exemption for the child.

He meets all but 4 & 5. But if she signs form 8332 (Release of Exemption) - doesn't that allow him to qualify for HOH and claim the exemption?

No. He doesn't meet number 4, so he cannot be head of household. He either finishes up the divorce this year or file MFS again next year.