Ch. 3 Revisited (con't)

•Items Specifically Included in Gross Income
A.Alimony and Separate Maintenance Payments
•For Divorces after 1984, payments are classified as alimony only if the meet the following conditions
1.The Payments are in cash
2.The decree does not specify that the payments are not alimony
3.The payer and the payee are not members of the same household at the time the payments are made
4.There is no liability on payments after the death of the payee
Under Post 1984 rules, transfer of appreciated property to a former spouse under a divorce decree are not taxable events
B.Imputed Intent on Below-Market Loan
•If a taxpayer makes a “below market interest rate” loan, there can be imputed intent. The rate of imputed intent is the rate the Federal Government pays on new borrowings
•These rules apply to the following types of loans
Gift Loans
Compensation Related Loans
Corporation Share-holder loans
 Tax avoidance loans
C. Prizes and Awards are included in Gross Income (Sec. 74 IRS code)
D. Social Security Benefits. Part of it mus be included in Gross Income, and the amount is the lesser amount calculated under 2 different formulas.