Marylee and George divorced in 2017 after 20 years of marriage during which time George gave up his career and stayed home with their children. In 2018, Marylee, the CEO of a mail order company, transfers their home valued at $450,000 and held in joint tenancy to George as part of the divorce settlement. She also agreed to pay George $4,000 per month alimony and $6,000 per month in child support beginning in January of 2018. If George has no other income, what is his adjusted gross income for 2018?

Question

Quizplus · Accepted Answer

The transfer of the home is not taxable, as it is part of a divorce settlement. Alimony is taxable income for George, so he will have $48,000 in taxable income ($4,000 per month x 12 months = $48,000). Child support is not taxable income, so it does not affect his adjusted gross income. Therefore, his adjusted gross income for 2018 is $48,000.

Marylee and George Divorced in 2017 After 20 Years of Marriage