Question

The Renfros were granted a decree of divorce in 2015. In accordance with the decree, Josh Renfro is to pay his ex-wife $24,000 a year until their only child, Evelyn, now 10, turns 18, and then the payments will decrease to $14,000 per year. For 2016, how much can Josh deduct as alimony for the year?

A) $10,000.
B) $14,000.
C) $24,000.
D) None of the choices are correct.

Answer 1

For the year 2016, Josh Renfro can deduct $24,000 as alimony, because the agreed payments of $24,000 per year continue until their child turns 18.

Step-by-step explanation:

The student's question pertains to understanding how much Josh Renfro can deduct as alimony for the year 2016, given that he is supposed to pay his ex-wife $24,000 a year until their child turns 18, and then the payments would decrease to $14,000 per year.

Considering the information provided, for tax purposes in 2016, Josh would be able to deduct $24,000 as alimony, because the lower payment rate of $14,000 per year does not start until the child, Evelyn, turns 18. Therefore, the correct answer to the student's query is C) $24,000.