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.

2.
C

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

3.
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.

4.
D

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.

5.
A

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.

6.
D

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.




Introduction

Related Articles
  1. Trading

    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.
  2. Financial Advisor

    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.
  3. 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.
  4. Financial Advisor

    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 ...
  5. Personal Finance

    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.
  6. Personal Finance

    Getting U.S. Tax Deductions On Foreign Real Estate

    If your home or second home is not in the United States, you can still get U.S. tax deductions. How many and what kind depends on whether you also rent it.
  7. Personal Finance

    Investing In Property Out Of State

    If you can't afford property close to home, consider taking the real estate plunge elsewhere in the country.
  8. Personal Finance

    How Does Depreciation Reduce My Tax Bill?

    How the depreciation tax rule can assist real estate investors.
  9. Managing Wealth

    How Does a Tax-Free Exchange Work?

    In regards to the sale of property, particularly in real estate, a 1031 exchange is increasingly being recognized for its tax benefits to investors of all levels.
  10. Investing

    How Property Rights Affect Economies

    Property rights are laws governments create that enable investors to control, benefit from, and transfer property.
Trading Center