Barney and Betty got divorced this year. In the divorce decree Betty agreed to transfer100 shares of common stock worth $50,000 and pay Barney $24,000 per year for five years (or until Barney's death or remarriage). What amount (if any) is included in Barney's gross income this year?

Question

Quizplus · Accepted Answer

Only the $24,000 payment per year is included in Barney's gross income. The transfer of the 100 shares of common stock is not included because it is a property settlement and not considered income for tax purposes.

Barney and Betty Got Divorced This Year