Under the Terms of a Divorce Agreement Entered into in 2018

question 18

Multiple Choice

Under the terms of a divorce agreement entered into in 2018, Kim was to pay her husband Tom $7,000 per month in alimony. Kim's payments will be reduced to $3,000 per month when their 9 year-old son becomes 21. The husband has custody of their son. For a twelve-month period, Kim can deduct from gross income (and Tom must include in gross income) :

• A) $60,000.
• B) $48,000.
• C) $36,000.
• D) $0.
• E) None of these.

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Definitions:

Employed Category

A classification for individuals who are currently holding a job or are in employment.

Unemployed Category

A classification used in labor statistics to describe individuals who are not currently employed but are actively seeking employment.

Not in the Labor Force

Individuals not in the labor force are those who are not seeking employment and are not currently employed, including retirees, students, and homemakers.

Employed Category

A classification within the labor force that includes all individuals who are gainfully employed, either in full-time or part-time positions.