Are alimony payments considered taxable income if the divorce decree was executed in 2017?

Alimony payments are considered taxable income when they are part of a divorce agreement executed before January 1, 2019. This is due to tax law changes introduced by the Tax Cuts and Jobs Act (TCJA), which eliminated the tax deductibility of alimony payments for divorces finalized after December 31, 2018. Since the divorce decree in this scenario was executed in 2017, the original rules apply, making alimony payments taxable to the recipient.

Therefore, the correct understanding is that the recipient of alimony must report these payments as taxable income on their tax return for the tax years that apply. This is a fundamental aspect of tax law related to divorce settlements prior to the legislative changes that took effect in 2019.