Will and Janine are divorced during the current year. Will is to have custody of their two children and will receive their house as part of the divorce sttlement. The house, which Will and Janine bought for $60000 is worth $100000. Janine is to receive one of their automobiles, for which they paid $21000 and which is now worth $9000. Will will get the other automobile, which cost $6000 and which is now worth $2000. Janine is to pay Will alimony of $900 per month. However, the alimony payment is to be reduced by $200 per month as each child reaches age 8 or if a child shoud die or marry before reaching age 18. What are the tax effects of the divorce settlement for Will and Janine?

child tax credit ($2,000 per child under 18)
child and dependent tax credit (up to $3,000 per child under 13 and $500 for dependent over 13)
American opportunity education credit (up to $2,500 per child that studies x 4 years maximum)

Alimony can no longer be deducted from Janine's AGI, nor it should be included in Will's AGI.

Property distributions (cars and house) will not have any effect in their taxes, but if they sell them, their basis will be the value at the time of divorce.