Which of the Following Statements About Divorce Settlements Is True

question 42

Multiple Choice

Which of the following statements about divorce settlements is true?

• A) Property transfers pursuant to divorce have no income tax consequences.
• B) Child support is excluded from the recipient's gross income.
• C) Child support is an above-the-line deduction for the payer.
• D) Statements A. and B. are true.

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Definitions:

Severance Pay

Severance pay refers to the compensation that an employer provides to an employee who has been laid off or terminated, typically based on the length of employment.

Wrongful Dismissal

Termination of employment that breaches the terms of the contract of employment or a statutory requirement.

Reasonable Notice

A legal principle requiring a party to provide adequate notice to the other before taking some action, typically related to termination of employment or contractual agreements.