a. Under a 2017 divorce agreement, Joan is required to pay her ex-husband, Bill, $700 a month until their daughter is 18 years of age. At that time, the required payments are reduced to $450 per month. 1. How much of each $700 payment may be deducted as alimony by Joan? 2. How much of each $700 payment must be included in Bill's taxable income? 3. How much would be deductible/included if the divorce agreement were dated 2021? b. Under the terms of a property settlement executed during 2021, Jane transferred property worth $450,000 to her ex-husband, Tom. The property has a tax basis to Jane of $425,000. 1. How much taxable gain must be recognized by Jane at the time of the transfer? 2. What is the amount of Tom's tax basis in the property he received from Jane?

a. Under a 2017 divorce agreement, Joan is required to pay her ex-husband, Bill, $700 a month until their daughter is 18 years of age. At that time, the required payments are reduced to $450 per month. 1. How much of each $700 payment may be deducted as alimony by Joan? 2. How much of each $700 payment must be included in Bill's taxable income? 3. How much would be deductible/included if the divorce agreement were dated 2021? b. Under the terms of a property settlement executed during 2021, Jane transferred property worth $450,000 to her ex-husband, Tom. The property has a tax basis to Jane of $425,000. 1. How much taxable gain must be recognized by Jane at the time of the transfer? 2. What is the amount of Tom's tax basis in the property he received from Jane?

Income Tax Fundamentals 2020

38th Edition

ISBN:9780357391129

Author:WHITTENBURG

Publisher:WHITTENBURG

Chapter2: Gross Income And Exclusions

Section: Chapter Questions

Problem 27P: Answer the following questions: Under a 2017 divorce agreement, Joan is required to pay her...

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