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Part $1$

Under a divorce agreement executed in$2017,$ an$$ ex$-$wife receives from her former husband cash of$$ $$25,000$ per year for eight years. The agreement does not explicitly state that the payments are excludable from gross income.

Read the requirements.

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Part $1$

Requirement a$.$ Does the$$ ex$-$wife have gross$$ income? If$$ so$,$ how$$ much?

A$.$

Yes. According to Secs.$71($a$)$ and$($b$),$ the wife includes$$ $$25,000$ per year.$$ Also, the divorce agreement must explicitly state that the husband has no liability to make payments after the$$ wife's death.

B$.$

No$.$ According to Sec.$71($b$),$ the wife has no gross income unless the payee spouse and the payor spouse are still members of the same household.

C$.$

No$.$ According to$$ Sec$\mathrm{.}71($b$)$ the wife has no gross income until payments are made after her death.

D$.$

Yes. According to Secs.$71($a$)$ and$($b$),$ the wife includes$$ $$25,000$ per year as long as they were divorced for the entire year.