Ted earned $150,000 during the current year.He paid Alice, his former wife, $75,000 in alimony.The couple divorced in 2017.Under these facts, the tax is paid by the person who benefits from the income rather than the person who earned the income.

Question

Quizplus · Accepted Answer

This is because alimony is taxable income for the recipient and is deductible for the payer. Therefore, Alice would need to include the $75,000 as taxable income and pay taxes on it, while Ted would be able to deduct it on his tax return.

Ted Earned $150,000 During the Current Year