Reference no: EM131726491

Question - All, a divorced person and custodian of her 12-year old child, filed her year one federal income tax return as head of a household. She submitted the following information to the CPA who prepared her year one return:

The divorce agreement, executed nine years ago, provides for Hall to receive $3,000 per month, of which $600 is designated as child support. After the child reaches 18, the monthly payments are to be reduced to $2,400 and are to continue until remarriage or death. However, for year one, Hall received a total of only $5,000 from her former husband. Hall paid an attorney $2,000 in year one in a suit to collect the alimony owed.

What amount should be reported in Hall's year one return as alimony income?

$0

$36,000

$28,800

$5,000