Richard and Alice are divorced and under the terms of their written divorce agreement signed on December 30, 2011, Richard was required to pay Alice $1,500 per month of which $600 was designated as child support. He made 12 such payments in 2019. Additionally, Richard voluntarily paid Alice $1,200 per month for 12 months of 2019, no portion of which was designated as child support. Assuming that Alice has no other income, her tax return for 2019 should show gross income of:

Question

Quizplus · Accepted Answer

Out of the $1,500 per month that Richard pays Alice, $600 is designated as child support. Child support is not taxable income, so Alice should not include the $7,200 ($600 x 12 months) on her tax return.
 
The remaining $900 per month that Alice receives from Richard is alimony. Alimony is taxable income, so Alice should include the $10,800 ($900 x 12 months) on her tax return.

Adding the $10,800 of alimony to the $0 of child support, Alice's gross income for 2019 would be $10,800. Therefore, the best choice is C.

Richard and Alice Are Divorced and Under the Terms of Their