Question

Under the terms of a divorce agreement entered into in 2018, Kim was to pay her husband Tom $7,000 per month in alimony, Kim's payments will be reduced to $3,000 per month when their 9 year-old son becomes 21. The husband has custody of their son.
For a 12 month period, Kim can deduct from gross income (and Tom must include in gross income):

a. $36,000.

b. $0.

c. $60,000.

d. $48,000.

e. None of these choices are correct.

Answer 1

Answer:

a. $36,000

Explanation:

Since the total payment is $7,000 which is reduced to $3,000 because of child

The $4,000 reflects the payment of the child. This $4,000 is come from

= $7,000 - $3,000

= $4,000

So, only $3,000 for 12 months would be allowed as a deduction from gross income

So, the total amount for deduction would be

= $3,000 × 12 months

= $36,000