Question

John and Mary were divorced in 2017. The divorce decree (executed 6/30/2017) provides that John pay alimony of $10K per year, to be reduced by 20% of on their child's 18th birthday. During the CY, the $10K was paid in the following way: John paid $7K directly to Mary and $3K to Spring College for Mary's tuition. What amount of these payments should be reported as income for Mary's CY income tax return?

A. $5,600
B. $8,000
C. $8,600
D. $10,000

Answer 1

correct answer is B. $8,000

Step-by-step explanation:

given data

John pay alimony = $10000 per year

reduced on child's 18th birthday = 20%

paid directly = $7000

paid Spring College for tuition = $3000

solution

as here he paid to divorce agreement before 31/12/2018 and that would be income to mary while their child support not

and fund amount qualify as child support only on these condition

any specific amount fix

paid solely for support minor child

it payable by the decree or agreement

so here reduced on child's 18th birthday

so qualify as child support = 20% of $10000 = $2000

so remaining $8000 is alomony and that will be income to Mary

so here correct answer is B. $8,000