W pays less Child Support Payments To a custodial spouse are not deductible by the payer because the payments merely satisfy a legal obligation that would exist regardless of whether the spouses were divorced. Likewise, such payments are not included in the gross income of the custodial spouse. Gift Loans Results in income to the donor and interest expense to donee. However, the interest may be non-deductible and the net effect of the scheme may be to create income. Funds cannot be used to purchase income-producing property.
Interest income is imputed to father and is limited to daughter s net investment income.
Accounting for an annuity is similar to that of accounting for depreciation. That is, the cost of the asset is allocated over its estimated life. Actual life less than estimated life - A loss is claimed at the end of the actual life. Actual life more than estimated life - Cost allocations cease once the original cost has been recovered. Recover period is determined from actuarial tables based on life expectancies.