Assume for this question only that Melissa has a healthy baby boy and they name...
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Accounting
Assume for this question only that Melissa has a healthy baby boy and they name him Kole. The stress of the new baby deteriorates their relationship and Kenny and Melissa break up 6 months later. Kenny is ordered by the court to pay $2,000 a month in child support to Melissa which includes $4,000 a year for day care costs. In addition, Kenny purchased a minivan for Melissa to drive Kole. The FMV of the vehicle is $24,000. For these items only, what is Kennys taxable gift to Melissa this year and how much is deductible for income tax on his return?
A) Gift: $20,000 Deductible: $4,000
B) Gift: $10,000 Deductible: $0
C) Gift: $34,000 Deductible: $0
D) Gift: $10,000 Deductible: $4,000
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