Question

Under the terms of a divorce agreement entered into in 2017, Lanny was to pay his wife Joyce $2,000 per month in alimony and $500 per month in child support. For a 12-month period, Lanny can deduct from gross income (and Joyce must include in gross income):A. $0.

B. $6,000.
C. $24,000.
D. $30,000.
E. None of these.

Answer 1

$24000 ( C )

Step-by-step explanation:

under the Alimony rules child support payments is distinguished form alimony payments and must be recorded as part of the gross income of the recipient of the Alimony.

Child support is neither deducted form gross income or added to gross income because child support is a household cost and it is not taxable. for a period of 1 year Lanny will pay a total of = $2000 * 12 = $24000 in alimony and Joyce will receive = $24000 as alimony payments

hence Lanny will deduct $24000 from his gross income while Joyce will include $24000 in her gross income.

Answer 2

C. $24,000.

Step-by-step explanation:

The $500 per month for child support is not deductible by Lanny.

Child support is not tax deductible according to IRA rules.

So the for a 12-month period, Lanny would only include the alimony payment to his wife in his gross income.

$2,000 * 12 = 24,000

Lanny can deduct from gross income $24,000.