Under a Court-Ordered Decree of Separate Maintenance Executed in 2015

question 3

Multiple Choice

Under a court-ordered decree of separate maintenance executed in 2015, Rebecca is required to pay her ex-husband, Carl, $4,750 a month until their youngest son turns age 18. At that time, the required payments are reduced to $2,100 per month. How much of each payment is deductible by Rebecca as alimony for 2015?

• A) $6,850.
• B) $4,750.
• C) $2,100.
• D)$0.

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Definitions:

Contract Cost

is the total expense that a company recognizes on its books for a specific contract over its duration, encompassing labor, materials, and overhead.

Deductible IRA Contribution

A contribution to an Individual Retirement Account (IRA) for which the taxpayer can claim a tax deduction, subject to certain conditions and limits.

Pension Plan

A retirement plan funded by employers or employees, or both, paying out a fixed sum to retirees, often based on salary and years of service.

AGI

Short for Adjusted Gross Income; it is your gross income after adjustments and deductions, crucial for tax calculations.