| Alimony Recapture Rules: | ||||||||||
| Year 1 | = | Year 1 | - | (Y2* + Y3)/2 | + | 15,000 | ||||
| Year 2 | = | Year 2 | - | Year 3 | + | 15,000 | ||||
| Y = Year | * (the amount as adjusted for year two recapture) | |||||||||
| Facts for an example: | ||||||||||
| Year 1 | 45,000 | |||||||||
| Year 2 | 25,000 | |||||||||
| Year 3 | 20,000 | |||||||||
| Test for Year 2: | ||||||||||
| Year 2 | = | Year 2 | - | Year 3 | + | 15,000 | ||||
| 25,000 | - | 20,000 | + | 15,000 | ||||||
| 25,000 | - | 35,000 | No recapture | |||||||
| Recapture | - | << n/a | ||||||||
| Therefore year 2 deduction is = | 25,000 | |||||||||
| Test for Year 1: | ||||||||||
| Year 1 | = | Year 1 | - | (2 + 3)/2 | + | 15,000 | ||||
| 45,000 | - | 22,500 | + | 15,000 | ||||||
| 45,000 | - | 37,500 | ||||||||
| Recapture | 7,500 | |||||||||
| Note that if there were Year 3 recapture, | ||||||||||
| the amount used for year two recapture is the net number. | ||||||||||
| Note: All recapture is in year 3. | ||||||||||
| Effect: | Deduction | Recapture | Annual Total | |||||||
| or Income | ||||||||||
| Year 1 | 45,000 | 45,000 | ||||||||
| Year 2 | 25,000 | 25,000 | ||||||||
| Year 3 | 20,000 | (7,500) | 12,500 | |||||||