1. Charles and Camilla are getting divorced. Under the terms of the decree Charl

Question

1.     Charles and Camilla are getting divorced. Under the terms of the decree Charles will pay Camilla $50,000 in cash in each of the next five years (or until Camilla's death or remarriage). In addition, Charles will transfer a castle worth $2,000,000 to Camilla and pay $12,000 per year to support their son, Clyde, until he turns 19 years old. What amount (if any) is included in Camilla's gross income this year?

A. $2,062,000 B. $12,000

C. $50,000

D. $2,050,000

E. None of the payments are included in gross income

Explanation / Answer

C. $50,000

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