Rick and Lenora Were Granted a Divorce in 2016 How Much Should Lenora Include in Her 2017 Taxable Income

question 75

Multiple Choice

Rick and Lenora were granted a divorce in 2016.In accordance with the decree,Rick made the following payments to Lenora in 2017: $\begin{array}{lr}\text {Child support payments contingent on the age of the child }&\$4,000\\\text {Annual cash payments other than child support }&\$6,000\\\end{array}$
How much should Lenora include in her 2017 taxable income as alimony?

• A)$10,000.
• B)$6,000.
• C)$4,000.
• D)$0.

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Definitions:

Behavioral Economists

Scholars who study the effects of psychological, cognitive, emotional, cultural, and social factors on the economic decisions of individuals and institutions.

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A method where an employer withholds a portion of an employee's salary for taxes, insurance premiums, or contributions to retirement plans, directly reducing the employee's take-home pay.

Retirement Fund

A financial arrangement or savings plan intended to support individuals financially after they retire from active work.

Salary Smoothing

A practice of adjusting salaries over time to stabilize employees' income, often to mitigate the impact of business cycle fluctuations.