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a. Under a 2017 divorce agreement, Linda is required to pay her ex-husband, Bill, $4,160 a month until their daughter is 18 years of age. At that time, the required payments are reduced to $2,912 per month.

1. How much of each $4,160 payment may be deducted as alimony by Linda?

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2. How much of each $4,160 payment must be included in Bill's taxable income?

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3. How much would be deductible/included if the divorce agreement were dated 2021?

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b. Under the terms of a property settlement executed during 2021, Chloe transferred property worth $659,250 to her ex-husband, Alex. The property has a tax basis to Chloe of $527,400.

1. How much taxable gain must be recognized by Chloe at the time of the transfer?

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2. What is the amount of Alex's tax basis in the property he received from Chloe?