Question

Under the terms of a divorce agreement, Foster is to pay his wife Dorian $1,000 per month. Under the agreement, of this $1,000 per month, $200 is for child support and $800 is alimony. During the current year, Foster paid $12,000 under the agreement. The couple divorced in 2010. How much of these payments can Foster deduct for AGI (and Dorian must include in gross income)?

2. Derek and Cynthia are married and together have AGI of $100,000 in Year 1. They pay $3,000 for health insurance premiums in Year 1. During the year, they paid the following amounts for medical care: $6,900 in doctor and dentist bills and hospital expenses, and $2,300 for prescription medicine and drugs. In November of Year 1, they received an insurance reimbursement of $2,500 for these expenses. Determine the maximum deduction allowable for medical expenses in Year 1.

Answer 1

Foster is eligible to deduct alimony payment to former wife but it doesn't include child support payment

Elegible Deduction amount to Foster = 12 months * $ 800 = $9600

Dorian will include $9600 in her taxable gross income.

Child Support Payment will not be deduct from Foster Income and not to be included in Dorian gross income.