The Oroscos were granted a decree of divorce effective January 1, 2015. In accordance with the decree, César Orosco is to pay his wife $24,000 a year until their only child, Ricardo now 11, turns 18, and then the payments will decrease by $11,000 per year. For 2015, how much can César deduct as alimony?

Question

Quizplus · Accepted Answer

For alimony payments to qualify for a deduction, they must meet several requirements including:
1. Payments must be made to or on behalf of a spouse or ex-spouse
2. Payments must be made in cash or a cash equivalent
3. The spouses must not file a joint tax return with each other
4. The payments must be designated as alimony in the divorce decree or separation agreement

In this question, César Orosco is making payments to his ex-spouse in accordance with their divorce decree. Therefore, the payments qualify as alimony payments. For 2015, César will pay his wife $24,000 in alimony. Therefore, he can deduct $24,000 as alimony on his tax return.

The Oroscos Were Granted a Decree of Divorce Effective January