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    Income tax: alimony and property transfers

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    Thomas and Sally were divorced last year. as a result, Thomas must pay Sally alimony of 100,000 per year starting this year and relinquish the house and car with a combined value of 170,000 and a combined cost basis of 155,000. The house and car are given as a property settlement. As a result of these transactions Thomas has a deduction of?

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    Solution Preview

    Thomas will receive a deduction of $100,000 on his tax return for this year. The shuffling of assets ...

    Solution Summary

    The solution discusses the tax treatment of the alimony payment and the transfer of the house.