Frank and Lilly are negotiating their divorce settlement. Frank has offered to pay Lilly $12,000 each year for 10 years, but payments cease upon Lilly's death. Assuming this proposition is finalized in 2020, what are its tax implications? I. Lilly must recognize gross income when the money is received. II. Frank has a deduction for adjusted gross income in the year of payment. a. Only statement II is correct. Ob. Only statement I is correct. Oc. Both statements are correct. d. None of these statements are correct.