Barney and Betty got divorced this year.In the divorce decree Betty agreed to transfer 100 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

The $24,000 annual payment is considered alimony, which is taxable income for Barney. The transfer of stock is not included in gross income as it is a property settlement.

Barney and Betty Got Divorced This Year