The IRS Does Not Consider Property Settlements in Consideration of Marriage

question 54

Essay

The IRS does not consider property settlements in consideration of marriage as being transfers for valuable consideration. Consequently, such prenuptial settlements are subject to the Federal gift tax. Why, then, are property settlements incident to divorce exempt from the gift tax?

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Definitions:

Classification

The systematic process of organizing or categorizing items, ideas, or information based on shared characteristics or principles.

Piaget's Conservation Task

A type of task designed by Jean Piaget to assess a child's ability to recognize that certain properties of objects remain the same even when their appearances change.

Decentration

The cognitive ability to consider multiple aspects of a situation instead of focusing on a single viewpoint, a concept often discussed in developmental psychology.

Conservation of Number

A concept in cognitive development that reflects a child's ability to understand that the quantity of a set of items remains the same regardless of how they are arranged.