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Mr. and Mrs. Melrose recently divorced. Under the terms of the divorce decree, Mr. Melrose transferred...

Mr. and Mrs. Melrose recently divorced. Under the terms of the divorce decree, Mr. Melrose transferred to Mrs. Melrose his one-half interest in their former personal residence. The home was valued at $350,000 and had a tax basis of $275,000. He is also required to pay $1,500 per month to his ex-wife, of which $1,000 represents child support for their 7-year old son and $500 is alimony.

He transferred the residence in August of the current year and made each of the required monthly payments for August through December. How much of a tax deduction is Mr. Melrose permitted for these transfers this year?

$2,500

$5,000

$7,500

$9,000
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Answer #1

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Solution: Answer $ 2,500 Explanation As per IRS, he will only get deduction of alimony part of $500 per month. Child support

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