LO.4 Karen and Al are in the process of negotiating a divorce. They have tentatively agreed on all of the terms, and Karen is to pay Al $240,000 over a three-year period. Furthermore, the payments are to be spread over the three years in amounts that will qualify as alimony and minimize alimony recapture. Al wants to receive as much of the

$240,000 as soon as possible because if he dies or remarries within the three years, the payments will cease. Which of the following two patterns of payments will result in the least alimony recapture in year 3?

Year Option 1:

Amount Paid Option 2:

Amount Paid 1 $100,000 $100,000 2 70,000 90,000 3 70,000 50,000 Total $240,000 $240,000