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)The income 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 is taxed on $90,000 because the $20,000 alimony is income assigned to the former spouse.
• E)None of these.

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Definitions:

Optimal Amount

The most efficient, beneficial, or effective quantity of a resource, investment, or input to achieve a specific objective.

5 C's of Credit

The 5 C's of Credit refer to the five key factors that lenders consider when evaluating a borrower's creditworthiness: character, capacity, capital, collateral, and conditions.

Collateral

Assets pledged by a borrower to secure a loan or other credit, and subject to seizure in the event of default.

Credit Obligations

The responsibilities to repay debt incurred through borrowing or credit agreements.