Question

Ted earned $150,000 during the current year. He paid Alice, his former wife, $75,000 in alimony. The couple divorced in 2017. Under these facts, the tax is paid by the person who benefits from the income rather than the person who earned the income.

True / False.

Answer 1

Answer: True - The alimony rules tax the person who benefits from the $75,000, which is Alice, and the person who makes the payment, Ted, is allowed a deduction.

Step-by-step explanation: