Under the Terms of a Divorce Agreement, Lanny Was to Pay

question 28

Multiple Choice

Under the terms of a divorce agreement, Lanny was to pay his wife Joyce $2,000 per month in alimony and $500 per month in child support. For a twelve-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.

---

Definitions:

GICs

Guaranteed Investment Certificates, a type of Canadian investment that offers a guaranteed rate of return over a fixed period of time.

Compounded Annually

Interest on an investment calculated once a year, taking into account both the initial principal and the interest from previous periods.

Maturity Value

The amount payable to an investor at the end of a bond's term or at the time of maturity, including both the principal and interest.

Income Yield

A financial ratio that shows how much a company pays out in dividends each year relative to its stock price.