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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 Summary

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

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

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