Under the terms of a divorce agreement, Ron is to pay his former wife Jill $10,000 per month. The payments are to be reduced to $7,000 per month when their 15 year-old child reaches age 18 . During the current year, Ron paid $120,000 under the agreement. Assuming all of the other conditions for alimony are satisfied, Ron can deduct from gross income (and Jill must include in gross income) as
alimony:
a. $120,000.
b. $84,000.
c. $36,000.
d. $0.
e. None of these is correct.
b
RATIONALE: The amount paid is in part dependent upon the child's age, and therefore is considered child support. The balance of the payments, $7,000 per month, is alimony.
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A) the lifetime value of the customer base. B) the total sales value of the product. C) the total number of active customers. D) the total cost of the product/service.
Merit pay differs from bonus programs in what way?
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