A Couple Was Divorced in 2016, Resulting in the Payment

question 1709

Multiple Choice

A couple was divorced in 2016, resulting in the payment of alimony. Alimony paid in 2018 is

• A) deductible by the payor and included in income by the payee.
• B) deductible by both the payor and the payee.
• C) an item which does not affect the payor's or the payee's tax reporting.
• D) included in income by the payor and deducted by the payee.

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Definitions:

Financial Planning

The process of creating strategies for managing finance, including budgeting, saving, investing, and planning for future financial needs.

Forecast Growth

The predicted increase in value or size of a company, economy, or particular financial metric over a specified future period.

External Financing

Funds raised by a business from outside sources, including loans, bond sales, and equity investments, as opposed to internal financings such as retained earnings.

Investment Decisions

The process of deciding where to allocate resources and capital in order to generate returns in the future.