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Income Tax Planning
Chapter 4: Gross Income from Personal and Investment Activities/ALIMONY VS. CHILD SUPPORT: EXAMPLE
Warren Academy Course SyllabusSyllabus Slides
Chapter Study Session

Chapter 4: Gross Income from Personal and Investment Activities

ALIMONY VS. CHILD SUPPORT: EXAMPLE

01.Core Concepts

• Under a provision of a divorce decree entered into before 2019, Hector is to pay his former spouse, Lydia, $5,000 per month. Lydia has custody of their only child, Tuco. When Tuco reaches age 18, the payments are to be reduced to $3,000 per month. The $3,000 is to be paid to Lydia for as long as she lives or until she remarries. • $2,000 of the $5,000 is child support because the payment is reduced when Tuco reaches age 18 (a contingency related to a child). • The remaining $3,000 is alimony.