Question CPA-01433

Which of the following conditions must be present in a post-1984 divorce

agreement for a payment to qualify as deductible alimony?

I. Payments must be in cash or its equivalent.

II. The payments must end at the recipient's death.

A. I only.

B. II only.

C. Both I and II.

D. Neither I nor II.

Explanation

Choice "C" is correct. Among the requirements for payments to be classified as

alimony are the following:

1. Payment must be in cash or its equivalent.

2. Payments cannot extend beyond the death of the payee-spouse.
3. Payments must be legally required pursuant to a written divorce (or
separation) agreement.
4. Payments cannot be made to members of the same household.
5. Payments must not be designated as anything other than alimony.
6. The spouses may not file a joint tax return.

Note: The requirements for payments to be considered alimony (income) are the
same as for payments to be alimony (deductions).

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