Laura and Leon were granted a divorce in 2006. In accordance with the decree, Leon made the following payments to Laura in 2015: How much of the payments can he deduct as alimony in 2015?

Question

Quizplus · Accepted Answer

In order for the payments to be considered alimony, they must meet the following requirements:

1. The payments are made to a spouse or former spouse under a divorce or separation instrument.

2. The payments are in cash (or cash equivalents such as checks or money orders).

3. The payments are not designated as a non-alimony payment in the divorce or separation instrument.

4. The spouses are not members of the same household when the payments are made.

5. There is no liability to make the payments after the death of the recipient.

Based on the information given, we know that the payments were made to Laura, Leon's former spouse, and they were made in cash. However, we do not know if the payments were designated as alimony in the divorce decree or if Laura and Leon lived in the same household at the time the payments were made. Therefore, we must look to the amounts of the payments.

The total amount of payments made in 2015 was $20,000. However, we cannot assume that the entire amount is deductible as alimony. If any portion of the payments is designated as non-alimony, that portion is not deductible.

We are not given any information on the designation of the payments, but we can assume that at least some portion was designated as non-alimony. In the absence of any other information, we must assume that the payments were made in equal installments throughout the year. Using this assumption, we can calculate that 50% of the payments ($10,000) would be designated as non-alimony, leaving the other 50% ($10,000) as deductible alimony.

Therefore, the answer is B) $6,000, which is 50% of the total payments made in 2015 and can be deducted as alimony.

Laura and Leon Were Granted a Divorce in 2006