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 2018.Additionally, Richard voluntarily paid Alice $1,200 per month for 12 months of 2018, no portion of which was designated as child support.Assuming that Alice has no other income, her tax return for 2018 should show gross income of:

Question

Quizplus · Accepted Answer

The $600 per month that Richard paid Alice as child support is not taxable income to her. However, the $1,200 per month that he voluntarily paid her with no designation as child support is considered taxable income. Therefore, Alice's gross income for 2018 would be:

($1,200 per month x 12 months) = $14,400

Minus the $600 per month designated as child support:

($600 per month x 12 months) = $7,200

So the final gross income for Alice for 2018 is:

$14,400 - $7,200 = $7,200

Therefore, the correct answer is (C) $10,800.

Richard and Alice Are Divorced and Under the Terms of Their