Under the Alimony Rules

question 8

Multiple Choice

Under the alimony rules:

• A) To determine whether a cash payment is alimony, one must consult the state laws that define alimony.
• B) A person who receives a property division has experienced an increase in wealth and thus should be subject to tax.
• C) Alimony paid per a 2015 divorce agreement is included in the gross income of the recipient of the payments.
• D) A person who earns $90,000 and pays $20,000 in alimony per a divorce agreement entered into in 2019, is allowed to deduct the $20,000.
• E) None of these.

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Definitions:

Foreign Corporation

A business entity that is registered and operates in a jurisdiction or country different from where it was originally incorporated.

Incorporated

The process by which a business is legally declared a corporate entity, separate from its owners.

Piercing The Veil

A legal concept that allows courts to hold shareholders or members of a corporation personally liable for the corporation's actions or debts under certain circumstances.

Nonprofit Corporation

An organization established for purposes other than making a profit, which typically benefits the public, a specific group of individuals, or the membership of the nonprofit.