Ted and Alice were divorced this year. Ted was awarded custody of the couple's two young children. Alice was to make the following monthly cash payments to him: Child support..............$3,400 Alimony......................$4,500 Assuming Alice makes the required payments, what amount of taxable income will Ted have to report each month?

$0

$7,900

$3,400

$4,500

Four years ago, Lyle was injured in an accident at work and sued the Indianpolis airport for damages. The jury required the airport authority to pay $600,000 compensation for Lyle's physical injuries, $200,000 for his lost wages (he couldn't go to work for quite a while) and $300,000 in punitive damages.

How much of the court-ordered payments is taxable income to Lyle?

		$0
		$1,100,000
		$400,000
		$500,000
		$900,000