After the divorce in 2015, Jeff was required to pay $18,000 per year to his former spouse, Darlene, who had custody of their child. Jeff's payments will be reduced to $12,000 per year in the event the child dies or reaches age 21. During the year, Jeff paid the $18,000 required under the divorce agreement. Darlene must include the $12,000 in gross income.

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Jeff paid the full amount required under the divorce agreement, which was $18,000. However, if the child dies or reaches age 21, his payments will be reduced to $12,000 per year. Darlene must include this reduced amount in her gross income as it is considered taxable alimony.

After the Divorce in 2015, Jeff Was Required to Pay