Please explain answer in detail as to how to work out answer..... 1. Charles and
ID: 2502400 • Letter: P
Question
Please explain answer in detail as to how to work out answer.....
1. Charles and Camilla are getting divorced.Under the terms of the decree Charles will pay Camilla $50,000in cash in each of the next five years (or until Camilla's death or remarriage). In addition,Charles will transfera 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
D. $2,050,000