Answer the following questions:
- 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.
- Under the terms of a property settlement executed during 2019, 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 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 2019? $____________
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? $____________
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- Individual Income TaxesAccountingISBN:9780357109731Author:HoffmanPublisher:CENGAGE LEARNING - CONSIGNMENT
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