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Topic
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NINJA Question –
John and Mary were divorced in 2014. The divorce decree provides that John pay alimony of $10,000 per year, to be reduced by 20% on their child’s 18th birthday. Their child turned age 18 during 2015. During 2015, John paid $7,000 directly to Mary and $3,000 to Spring College for Mary’s tuition. What amount of these payments should be reported as income in Mary’s 2015 income tax return?
A.
$5,600
Correct B.
$8,000
C.
$8,600
D.
$10,000
You are correct, the answer is B.
$10,000 total payment to Mary
– 2,000 (20% x $10,000) child support
$ 8,000 alimony
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Since the divorce decree reduced the payment by 20% to Mary based upon their child’s reaching 18 years of age, that portion of the payment represents child support.
Even though John paid $7,000 to Mary and $3,000 to Spring College for Mary’s tuition, only $8,000 is alimony and $2,000 is child support.
If any amount specified in a divorce decree is to be reduced based on any contingency which relates to a child (such as attaining a specific age, dying, leaving school, or marrying) that amount of the specific reduction is treated as child support from the beginning.
I’m not sure if I get this question. It appears that John’s alimony obligation in 2015 is $8,000. However he pays $7,000 to her and pays $3,000 for his wife’s college? How is paying for his wife’s college considered child support?
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