Question

1. Emily, a single mother of twins, receives both child support ($8,000/year) and alimony ($10,000/year) as family support payments from her ex-husband. How should she report these payments on her California tax return?

   1. a) She doesn’t need to include the family support payments of $18,000 on her California tax return.

   2. b) She must include the family support payments of $18,000 on her California tax return.

   3. c) She must include the child support payments of $8,000 on her California tax return.

   4. d) She must include the alimony payments of $10,000 on her California tax return.

2. Conan already knows he will not owe any tax for the taxable year, but he has not had time to complete his California tax return. He knows he will need an extension of time to file Form 540. What is he required to do to obtain an automatic extension?

   1. a) He is not required to do anything.

   2. b) He must file Form FTB 3519.

   3. c) If a federal extension was filed, he must mail a copy to the FTB.

   4. d) He must contact the FTB directly to request an extension.

6. Stuart wishes to contribute $400 to the State Parks Protection Fund/Parks Pass Purchase on his 2017 tax return. He would like to include the donation amount on his return as a charitable contribution. What amount and when can he deduct this as an itemized deduction on his tax return?

1. a) $400; deductible on his 2017 return

2. b) $205; deductible on his 2018 return

3. c) $400; deductible on his 2018 return

4. d) $205; deductible on his 2017 return

Answer 1

1) As pe California Taxation Structure, alimony means the payment received by the ex-spouse from his/her spouse due to the divorce or separation agreement as ordered by court of law to support the normal day to day expenditures of the spouse after divorce. It includes cash payments to a third party to provide a resistance for a former spouse, medical payments and expenses incurred by the recipient. Property settlement payments does not qualify as Alimony. As per the California Taxation Law, the person making the payment for alimony is allowed to make a deduction for the alimony paid. However, the recipient of alimony needs to be report the Alimony received as income in their California Tax return. Also, the Child Support Payments received are tax free.

Therefore, Emily must include the Alimony payments of $10000 on her California Tax Return.

2) An taxpayer who has his gross income more than the threshold limits has to file his Income tax return before April 15 of that taxable year. However, if he doesn't file his income tax return upto April 15, he is allowed an additional period of 6 months by filing Form FTB 3519. But, he has to deposit at least 90% of the taxes upto April 15. If a person doesn't owe any taxes for the taxable year he does not have to file the Income Tax Return.

Therefore Conan is not required to do anything.

3) The Contribution made to the State Parks Protection Fund/Parks Pass Purchase in excess of $195 is tax deductible as a charitable contribution in the year in which contribution is made. For the $195 contribution made the contributor buys the California Explorer Vehicle Pass that will grant access to 130 State Parks Recreational Parks and operated parks that charge a vehicle day use fee.

Therefore, Stuart made $400 contribution to State Parks Protection Fund/Parks Pass Purchase. $195 is exempt and the rest $205(400-195) is taxable in the year 2017 return.