Asked by Steven Gudiel on Jun 05, 2024

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Rick and Lenora were granted a divorce in 2016.In accordance with the decree,Rick made the following payments to Lenora in 2017: Child support payments contingent on the age of the child $4,000Annual cash payments other than child support $6,000\begin{array}{lr}\text {Child support payments contingent on the age of the child }&\$4,000\\\text {Annual cash payments other than child support }&\$6,000\\\end{array}Child support payments contingent on the age of the child Annual cash payments other than child support $4,000$6,000
How much should Lenora include in her 2017 taxable income as alimony?

A) $10,000.
B) $6,000.
C) $4,000.
D) $0.

Taxable Income

The portion of an individual's or entity's income used to determine how much tax is owed to the government, after all deductions and exemptions.

Child Support Payments

Payments made by a noncustodial parent to a custodial parent, guardian, or state, intended to facilitate the care and support of their children.

Cash Payments

Transactions where the payment for goods or services is made using currency or banknotes rather than checks or electronic transfers.

  • Identify the differences in tax treatment between alimony and child support payments.
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ML
Malissa LizetJun 10, 2024
Final Answer :
B
Explanation :
Child support payments are not considered taxable alimony. Therefore, only the $6,000 annual cash payments other than child support should be included in Lenora's taxable income as alimony.