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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.

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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.

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