Colin and Coleen Are Negotiating the Terms of a Divorce

question 86

Essay

Colin and Coleen are negotiating the terms of a divorce in 2018. Colin is willing to pay Coleen $20,000 of alimony for five years so that she can return to school and obtain a degree. Coleen has stated that she needs no less than $20,000 after taxes and will not accept Colin's offer of alimony. Coleen is in the 12 percent tax bracket and Colin is in the 22 percent tax bracket. How much alimony must Coleen receive to have $20,000 after taxes? What is Colin's after-tax cost of this alimony payment?

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Definitions:

Millimeters

A unit of length in the metric system, equal to one thousandth of a meter.

Iris Diaphragm

A thin, adjustable circular structure in optical devices or the eye that controls the amount of light passing through by changing its size.

Condenser

A device used to condense a gas or vapor into a liquid.

Ocular Lens

The lens closest to the eye in a microscope or telescope, through which the viewer looks to magnify the image formed by the objective lens.