Question

divorce was finalized on July 16, 2020. Brad was ordered to pay Angie $18,000 a year...

divorce was finalized on July 16, 2020. Brad was ordered to pay Angie $18,000 a year ($9,000 for 2019). Which of the following statements is TRUE?

Brad will claim $9,000 as an adjustment to income and Angie will report $9,000 as income.

Brad will claim $18,000 as an adjustment to income and Angie will report $18,000 as income.

Brad will not claim $9,000 as an adjustment to income and Angie does not have to report $9,000 as income.

Brad will not claim $18,000 as an adjustment to income and Angie does report $18,000 as income.

Homework Answers

Answer #1

Answer: Brad will not claim $18,000 as an adjustment to income and Angie does report $18,000 as income.

Alimony payments as per the new tax rules of  2019, the individual who pays alimony to an ex-spouse will no longer be able to deduct those payments from his income and at the sametime, the recipient of the money will no longer pay taxes on that income. Hence, the compensation of $1800000 is not adjustable as expenses for the payer, nor be treated as income by the receiver.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Clarence and Victoria were divorced in 2014. Clarence was ordered to pay Victoria $12,000 a year...
Clarence and Victoria were divorced in 2014. Clarence was ordered to pay Victoria $12,000 a year in alimony. How is the alimony reported on each of their 2020 tax return? a. Clarence claims $12,000 as an adjustment to income and Victoria reports $12,000 as income b. Clarence claims $12,000 as an adjustment to income and Victoria does not report the alimony she received c. Clarence reports $12,000 as income and Victoria reports $12,000 as an adjustment to income d. Clarence...
1.Norwell Company purchased $1,413,200 of new business equipment on July 10, 2020. This was Norwell's only...
1.Norwell Company purchased $1,413,200 of new business equipment on July 10, 2020. This was Norwell's only asset purchase for its 2020 taxable year. Compute Norwell's total tax depreciation deduction for this 7-year recovery property (assuming Norwell has sufficnet income for the Section 179 deduction). ? 2.Belsap Inc., a calendar year taxpayer, purchased a total of $590,000 depreciable personalty during May 2020. Which of the following statements is true? Multiple Choice Belsap can elect to expense 100% of the cost. The...
Early in its fiscal year ending December 31, 2018, San Antonio Outfitters finalized plans to expand...
Early in its fiscal year ending December 31, 2018, San Antonio Outfitters finalized plans to expand operations. The first stage was completed on January 1 with the purchase of a tract of land on the outskirts of the city. The land and existing building were purchased for $880,000. San Antonio paid $240,000 and signed a noninterest bearing note requiring the company to pay the remaining $640,000 on January 1, 2020. An interest rate of 10% properly reflects the time value...
The post-closing trial balance of Blossom Corporation at December 31, 2020, contains the following stockholders’ equity...
The post-closing trial balance of Blossom Corporation at December 31, 2020, contains the following stockholders’ equity accounts. Preferred Stock (14,000 shares issued) $700,000 Common Stock (240,000 shares issued) 2,400,000 Paid-in Capital in Excess of Par—Preferred Stock 240,000 Paid-in Capital in Excess of Par—Common Stock 380,000 Common Stock Dividends Distributable 240,000 Retained Earnings 966,500 A review of the accounting records reveals the following. 1. No errors have been made in recording 2020 transactions or in preparing the closing entry for net...
At the beginning of 2020, a donor makes a documented promise to contribute $10,000 per year...
At the beginning of 2020, a donor makes a documented promise to contribute $10,000 per year to a private NFP organization at the end of each of the years 2020, 2021, and 2022. The donor says the contribution may be used for any purpose, and the appropriate discount rate is 4%. The organization estimates that collections will be $9,000 per year for each of the three years. When the promise is recorded at the beginning of 2020, the allowance for...
At the beginning of 2020, a donor makes a documented promise to contribute $10,000 per year...
At the beginning of 2020, a donor makes a documented promise to contribute $10,000 per year to a private NFP organization at the end of each of the years 2020, 2021, and 2022. The donor says the contribution may be used for any purpose, and the appropriate discount rate is 4%. The organization estimates that collections will be $9,000 per year for each of the three years. When the promise is recorded at the beginning of 2020, the allowance for...
13. F and B were divorced in 1996, their divorce decree gave custody of their child...
13. F and B were divorced in 1996, their divorce decree gave custody of their child to B, and under a separate written agreement, B surrendered the dependency exemption to F for the current year. F paid child support of $800 in the current year. B provided the other support of $2,000 for their only child. What is B’s filing status and her number of exemptions? a. Head of household and one b. Head of household and two c. Single...
Epping Ltd commences operations on 1 July 2019 and presents its first Statement of Comprehensive Income...
Epping Ltd commences operations on 1 July 2019 and presents its first Statement of Comprehensive Income and an extract of first Statement of Financial Position on 30 June 2020. The statements are prepared before considering taxation. The following information is available. Statement of comprehensive income for the year ended 30 June 2020 Gross profit $1,200,000 Administration expenses (350,000) Salaries (250,000) Long-service leave (60,000) Warranty expenses (90,000) Depreciation expense - equipment (240,000) Doubtful debts expense (18,000) Rent (28,000) Accounting profit before...
You are the auditor of Super Fresh Pty Ltd (SPFL) for the year ended 30 June...
You are the auditor of Super Fresh Pty Ltd (SPFL) for the year ended 30 June 2019. SPFL is a manufacturer of tinned shellfish products. It purchases fresh shellfish from local suppliers, and frozen shellfish from South East Asia and processes it into tins at its Darwin factory and then transports it by road to supermarkets around Australia. You became aware of the following material event: On 1 July 2019 a customer at a Palmerston supermarket purchased a tin of...
Following are the income statement and balance sheet for Cisco Sytems for the year ended July...
Following are the income statement and balance sheet for Cisco Sytems for the year ended July 30, 2016. Cisco Sytems Consolidated Statements of Income Years Ended December ($ millions) July 30, 2016 July 25, 2015 Revenue Product $37,254 $37,750 Service 11,993 11,411 Total revenue 49,247 49,161 Cost of sales Product 14,161 15,377 Service 4,126 4,103 Total cost of sales 18,287 19,480 Gross margin 30,960 29,681 Operating expenses Research and development 6,296 6,207 Sales and marketing 9,619 9,821 General and administrative...