Under a divorce agreement executed in 2015, Bob is required to pay his ex-wife, Carol, $3,000 a month until their youngest daughter is 21 years of age. At that time, the required payments are reduced to $2,000 per month.   a. How much of each $3,000 payment may be deducted as alimony by Bob? b. How much of each $3,000 payment must be included in Carol's taxable income?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Under a divorce agreement executed in 2015, Bob is required to pay his ex-wife, Carol, $3,000 a month until their youngest daughter is 21 years of age. At that time, the required payments are reduced to $2,000 per month.

 

a.

How much of each $3,000 payment may be deducted as alimony by Bob?

b.

How much of each $3,000 payment must be included in Carol's taxable income?

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