Samantha works for IBM and is entitled to receive a monthly salary of $5,000. Samantha enters into a child-support agreement with her ex-husband whereby Samantha agrees topay $2,000 per month for all of 2021. In fact, Samantha informs IBM of the arrangement and has the $2,000 deposited directly into her ex’s bank account. When Samantha files her tax return, the IRS claims Samantha is taxed on the $24,000 she paid in child support. Samantha claims her ex should be taxed. Who is right?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Samantha works for IBM and is entitled to receive a monthly salary of $5,000. Samantha enters into a child-support agreement with her ex-husband whereby Samantha agrees topay $2,000 per month for all of 2021. In fact, Samantha informs IBM of the arrangement and has the $2,000 deposited directly into her ex’s bank account. When Samantha files her tax return, the IRS claims Samantha is taxed on the $24,000 she paid in child support. Samantha claims her ex should be taxed. Who is right?

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