Kate & Allie was one of my favorite shows when I grew up. It was also one of the few NYC based sitcoms filmed in New York City. Jane Curtin and Susan St. James play divorced best friends who live together after their divorces with their children in a Greenwich Village apartment. Of course, the apartment is unrealistically huge and is only affordable for the millionaires. The writing is genuinely funny and worth while to watch. It was one of the best comedies in the eighties. I remember when CBS's Monday Night was the place to be with shows like this on the air. Those days are long gone now.
As for the rumors that they were supposed to be a couple, maybe that would be on television today. Sadly, it's not uncommon for sisters with their children to live together. I always assumed that Kate and Allie were more like sisters rather than best friends.
Back in 1984, two divorced women living together with their children would not have sparked the controversy. They went to high school together and they dated men as well. Their arrangement was platonic but they were family without anything offensive. Maybe they should have written them as sisters to avoid the controversy. The network insisted the show ending with them going to separate beds at the end of each episode to avoid that speculation.