# formula in excel

M

#### MZ

I am trying to calculate a formula for alimony recapture for tax planning,
that will compute the amounts that must be paid for each of three years
without triggering recapture.

The facts are:

Assume total payment over 3 years is \$100,000

To calculate:

Year 1 payment must not be \$7,500 more than year 2 payment, nor \$22,500 more
than year 3 payment (otherwise, there will be excess payments that will
trigger a recapture tax)

Any negative results of calculations are considered zero

The formula that I have works only when there is enough in the total payment
to make a positive payment for each of the three years.

Legend:
A1 = Cell containing the total payments over 3 years (e.g., \$100,000)
A2 = Cell containing year 1 payment
A3 = Cell containing year 2 payment
A4 = Cell containing year 3 payment

Formula for year 1 payment: Cell A2
=A1 + 30000/3

Results: \$43,333

Formula for year 2 payment: Cell A3

=IF(SUM(A2-7500)<0,0,SUM(A2-7500))

Result: \$35,833

Formula for year 3 payment: Cell A4

=IF(SUM(A2-22500)<0,0,SUM(A2-22500))

Result: \$20,833

The problem with the formulas for years 2 and 3 is when the total payment
drops below a minimum amount to allow for full payments in years 2 and 3;
then, the total payments for years 2 and 3 will exceed the remaining amount
after subtracting year 1 payment from the total amount

For example, if total payments for all 3 years are \$35,000,
then year 1 payment is \$21,667, year 2, \$14,167, and year 3 is zero, for a
total of \$35,833. This exceeds the alloted total payment by \$833.
What can be added to the formulas for years 2 and 3 to assure that the total
payments for each of the 3 years will not exceed the alloted total amount?

Thank you

B

#### Bob Phillips

Try

=MAX(MIN(SUM(A2-7500),\$A\$1-SUM(\$A\$2:A2)),0)

=MAX(MIN(SUM(A3-2250),\$A\$1-SUM(\$A\$2:A3)),0)

D

#### David Biddulph

And of course you can replace SUM(A2-7500) by just A2-7500, because you
haven't given Excel anything to add to A2-7500.
Excel help for the SUM function will tell you what it does.