In 2017 Dalton and Christina were divorced. Their marital property was a persona

Question

In 2017 Dalton and Christina were divorced. Their marital property was a personal residence with a value of $600,000 and cost of $400,000 and Apple stock with a value of $80,000 and a cost of $40,000. Under the terms of the divorce agreement, Christina would receive the house and stock and Christina would pay Dalton $100,000 each year for 4 years of which $30,000 each year was for care of their 14 year old daughter.If Dalton should die, the remaining payments would cease to be made. Dalton and Christina lived apart when the payments were made to Dalton. The divorce agreement did not contain the word "alimony." Which of the following is true for each year prior to 2019? Dalton must recognize a $100.000 $200,000-$100,000)] gain on the sale of his interest in the house. Dalton recognizes alimony income of $100,000 each year. Christina is allowed to deduct $70,000 each year for alimony paid Christina is not allowed any alimony deductions.

Explanation / Answer

Solution: Dalton recognize alimony income of $100,000 each year

Explanation: The cash payment of $100,000 meets all of the requirements for alimony treatment. Therefore Christina is allowed to an alimony deduction for the $100,000 annual payments. Dalton recognize alimony income of $100,000 each year

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