Under the Terms of a Divorce Agreement Entered into in 2017

question 90

Multiple Choice

Under the terms of a divorce agreement entered into in 2017, Lanny was to pay his wife Joyce $2,000 per month in alimony and $500 per month in child support.For a 12-month period, Lanny can deduct from gross income (and Joyce must include in gross income) :

• A)$0.
• B)$6,000.
• C)$24,000.
• D)$30,000.
• E)None of these.

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Definitions:

Tax Deductible

Expenses that can be subtracted from gross income to reduce the amount of income subject to tax.

Translation Losses

Financial losses resulting from converting the financial statements of a foreign subsidiary into the parent company's currency.

Foreign Governments

The governing bodies of nations other than one's own, which may interact through diplomacy, trade, and other forms of engagement.

Political Risk

Political risk involves the possibility that political decisions, events, or conditions will significantly affect the profitability of a business or the expected value of a given economic action.