Under the terms of a divorce agreement entered into in 2017, Lanny was to pay his wife Joyce $2,000 per month in alimony and $500 per month in child support. For a twelve-month period, Lanny can deduct from gross income (and Joyce must include in gross income):
A) $0.
B) $6,000.
C) $24,000.
D) $30,000.
E) None of these.

Question

Quizplus · Accepted Answer

Under the tax law applicable in 2017, alimony payments are deductible by the payer and taxable to the recipient. Lanny can deduct $24,000 (12 months x $2,000) as alimony. Child support is not deductible.

Under the Terms of a Divorce Agreement Entered into in 2017