1. B

Property owned by the payer and paid for by the payer, will not be considered alimony even if the ex-spouse is utilizing the property, and a divorce decree states that payment must be made by the payer for the benefit of the payee.


Child support payments are non-deductible to the payer and non-taxable to the recipient.

C Jim's cost basis in the stock will be $70,000. When he sells the stock, he will have a taxable gain on the profit above the original cost basis. There is no deduction for property ordered to be transferred in a divorce decree.


The purpose of the qualified domestic relations order or QDRO is to inform and authorize the IRA custodian or 401k plan administrator on the court's ruling of the splitting of the retirement accounts.


Remember the acronym "C-WALT-WINN" for all the community property states. They include: California, Washington, Arizona, Louisiana, Texas, Wisconsin, Idaho, Nevada and New Mexico.


In community property states, the death of the first spouse allows both halves of the property to be "stepped-up" to the full FMV at date of death. So, Rose's new adjusted cost basis in the home would be $400,000.


Related Articles
  1. Personal Finance

    State Laws Dictate Division Of Joint Property

    In breakup, divorce or death, community or common law will determine how property is divided.
  2. Taxes

    The Fundamentals Of Spousal Support Taxation

    The spousal support that is paid out after a divorce can have varying tax implications. We'll look at what you need to know to settle on the best tax solution.
  3. Retirement

    Divorcing? The Right Way to Split Retirement Plans

    Mishandling how you define and allocate retirement-plan assets in a divorce can cost you plenty in taxes and aggravation. Here's how to do it right.
  4. Investing

    Understanding Total Return Swaps

    A total return swap is a contract in which a payer and receiver exchange the credit risk and market risk of an underlying asset.
  5. Retirement

    How to Protect Your Retirement After a Divorce

    Divorce is never fun, but knowing the rules and anticipating the impact of retirement plan division and pension payouts can make things easier.
  6. Investing

    When Using a Money Order Makes Sense

    Money orders are usually the least expensive way to send "cleared" funds to pay a bill (or traffic ticket). Here's how they work and what to watch out for.
  7. Retirement

    Divorce Over 50: Seven Mistakes to Avoid

    With longer lives and women's greater financial independence, divorces at 50+ are soaring. How to avoid money trouble when you sever ties with your spouse.
  8. Investing

    Use Real Estate To Put Off Tax Bills

    Find out how you can build wealth and reduce your taxes.
  9. Personal Finance

    How To Manage Your Finances Through A Divorce

    Dividing assets and liabilities in a divorce can be a sad, complicated task. But with some planning, patience and the help of a financial adviser, splitting couples can avoid some obvious and ...
  10. Investing

    Your Property Tax Assessment: What Does It Mean?

    The amount of a property tax bill is based on the property’s value, the exemptions it qualifies for, its use and the local property tax rate.
Frequently Asked Questions
  1. Depreciation Can Shield Taxes, Bolster Cash Flow

    Depreciation can be used as a tax-deductible expense to reduce tax costs, bolstering cash flow
  2. What schools did Warren Buffett attend on his way to getting his science and economics degrees?

    Learn how Warren Buffett became so successful through his attendance at multiple prestigious schools and his real-world experiences.
  3. How many attempts at each CFA exam is a candidate permitted?

    The CFA Institute allows an individual an unlimited amount of attempts at each examination.Although you can attempt the examination ...
  4. What's the average salary of a market research analyst?

    Learn about average stock market analyst salaries in the U.S. and different factors that affect salaries and overall levels ...
Trading Center