gage payme year ness, regardle long Ann lives. What amount is taxable as alimony in Ann's current-year return?
gage payme year ness, regardle long Ann lives. What amount is taxable as alimony in Ann's current-year return?
Chapter4: Gross Income: Concepts And Inclusions
Section: Chapter Questions
Problem 3BCRQ
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Transcribed Image Text:12. Ed and Ann Ross were divorced in January of the current year. In accordance with the
divorce decree, Ed transferred the title in their home to Ann. The home which had a fair market
value of $150,000 was subject to a $50,000 mortgage that had 20 more years to run. Monthly
mortgage payments amount to $1,000. Under the terms of the settlement, Ed is obligated to
make mortgage payments for the full 20-year term of the indebtedness, regardless of how
long Ann lives. What amount is taxable as alimony in Ann's current-year return?
A. $0
b. $12,000
c. $100,000
d. $112,000
e. None of the above. My answer
I
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