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Problem
Barney and Betty got divorced this year. In the divorce decree Betty agreed to transfer 175 shares of common stock worth $112,000 and pay Barney $54,700 per year for five years (or until Barney's death or remarriage). What amount (if any) is included in Barney's gross income this year?
A. $112,000.
B. None of the payments are included in gross income.
C. $54,700.
D. $166,700.
E. $356,000.
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