Jim and Shirley Noonan decide to separate after ten years of marriage. They have no children. To keep the separation amiable, they decide not to involve lawyers or the courts at this stage. They have a written separation agreement in which Shirley agrees to pay Jim $500 per month until he remarries. The payments will be taxed in Jim's hands and will be deductible from Shirley's income.

Question

Quizplus · Accepted Answer

This is a valid arrangement and falls within the guidelines of Canadian tax laws. It is important to note that if Jim does remarry, the payments will stop and Shirley will no longer be able to claim the deduction.

Jim and Shirley Noonan Decide to Separate After Ten Years