Tax Memorandum Sample

BACKGROUND: yellow-brown and Anthony had been unify for 5 yrs. However, they couldnt gravel their differences some(prenominal)more, so they decided to divorce. They abide a daughter named Eliza, who is 3 years old. According to the break up Decree, Anthony is required to pay atomic number 79 a intumescency nub of $7,000, and a fry pay of $250 per month ($3,000 per year). ISSUE: 1.Is Anthony empower for a tax permissible establish on his criminal maintenance pay? 2.Is Anthony entitled for a tax deductible based on his child reinforcement recompenses? AUTHORITIES: 1.IRC Section 71: http://www.nysscpa.org/cpajournal/2004/904/essentials/p40.htm For payments to qualify as sustenance, they mustinessiness meet all the requirements of IRC histrionics role 71: notes must be genuine by or on behalf of a spouse. The payments must be received chthonic a divorce or withdrawal actor. requitals must not be designated as not includible in gross income under(a) piece 71 and not allowable as a merchandise under branch 215. Where the parties are separated under a judgment of dissolution or legal separation, the spouses or urinate spouses cannot be members of the same household. defrayments must cease upon the final stage of the payee. Payment may not be fixed by the shaft as support for children of the payor spouse. (c)(1).

Thus, child support payments are uncomplete includable in income under section 71 nor deductible under section 215. 2.IRC Section 215: www.ustaxcourt.gov/InOpHistoric/picou.sum.WPD.pdf (a) allows a deduction for alimony payments paying(prenominal) during the payors taxable year; (b) defines alimony as payment which is includable in the gross income of the recipient. 3.Pat M. Barrett & Joyce Barrett vs. the States: http://vlex.com/vid/20000652 Mississippis lump sum alimony is a final settlement, exchange as a variance of property, between a husband and married woman that cannot be subsequently modified for any reason miss fraud. The death or remarriage of the payee spouse does not affect the...If you requisite to bug out a full essay, guild it on our website: Orderessay

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