Sarah  receives R20 000 per month from Allen in terms of a divorce order. The receipts will constitute gross income for Sarah.Question 11Select one:TrueFalse

Break Down the Problem

1. We need to determine whether the amount Sarah receives from Allen is considered gross income for tax purposes.

Relevant Concepts

2. In most tax law frameworks, gross income includes all sources of income that are not specifically exempt. According to common tax regulations, spousal support or alimony payments are generally classified as taxable income for the recipient.

Analysis and Detail

3. In Sarah's case, the R20,000 received monthly from Allen is a result of a divorce order. As alimony or spousal support, these payments are typically classified as gross income and thus subject to taxation.

Verify and Summarize

4. Given this understanding of tax law and income definitions, it is verified that Sarah's receipt qualifies as gross income. Hence, the statement is True.

Final Answer

True: The R20,000 that Sarah receives from Allen constitutes gross income for her.