George and Erin are divorced, and George is required to pay Erin $20,000 of alimony each year.George earns $75,000 a year.Erin is not required to include the alimony payments in gross income because George earned the income and therefore he should pay the tax on the income.

Question

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Even though George earned the income, the alimony payments are still considered taxable income for Erin and must be reported on her tax return. George may be able to deduct the alimony payments on his tax return as an adjustment to income.

George and Erin Are Divorced, and George Is Required to Pay