With Respect to Alimony and Property Settlements in a Divorce

question 80

Multiple Choice

With respect to alimony and property settlements in a divorce or separation,all of the following are true with the exception of

• A)a property settlement does not result in income to either spouse.
• B)no tax deduction is allowed for payment of a property settlement.
• C)the spouse receiving a property settlement has a basis equal to the basis of that property to the paying spouse prior to payment.
• D)no deduction is allowed for alimony paid to the former spouse if a property settlement is also paid.

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Definitions:

Short-Run Aggregate Supply

The total supply of goods and services that firms in an economy plan on selling during a short time period, given the current level of prices.

Actual Unemployment

The current level of unemployment in the economy, reflecting the number of people who are actively seeking employment but are without jobs.

Natural Rate

The level of economic activity, particularly unemployment or interest rates, that corresponds to the economy's long-term equilibrium without short-term cyclical fluctuations.

Potential Output

Potential output is the maximum amount of goods and services an economy can produce when it is most efficient and fully employed, without causing inflation.