Under a divorce agreementjoan is required to pay her

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a. Under a divorce agreementJoan is required to pay her ex-husband Bill $700 a month untiltheir daughter is 18 years of age. At that time, the requiredpayments are reduced to $500 per month.

1. How much of each $700payment may be deducted as alimony by Joan? $

2. How much of each $700payment must be included in Bill's taxable income? $

b. Under the terms of a propertysettlement executed during 2008, Jane transferred property worth$500,000 to her ex-husband, Tom. The property has a tax basis toJane of $400,000.

1. How much taxable gainmust be recognized by Jane at the time of the transfer? $

2. What is the amount ofTom's tax basis in the property he received from Jane?

Reference no: EM13611491

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