Tax DrillAlimony Indicate whether the following statements a

Tax Drill-Alimony Indicate whether the following statements are True\" or \"False\" regarding alimony and child sup a. A taxpayer realizes income from the receipt of child support payments made by his or her former spouse. b. The payor and payee of alimony may be members of the same household at the time the c. For payment to be considered alimony, there must be no liability to make the payments d. For post-1986 agreements, if payments in the first or second year exceed $15,000, payments are made. for any period after the death of the payee. alimony recapture may result to the extent of the excess alimony payments.

Solution

A. False- a tax payer does not realise income from the receipt of child support payments made by his or her former spouse.

B. False- The payor and payee are not members of the same household at the time the payments are made.

C. True: Payments are only classified as alimony if there is no liability to make the payments for any period after the death of the payee.

D. True: if payments in the rst or second year exceed $15,000. If the change in the amount of the payments exceeds statutory lim its, alimony recapture results to the extent of the excess alimony payments. In the third year, the payor must include the excess alimony payments for the rst and sec ond years in gross income, and the payee is allowed a deduction for these excess alimony payments.