With Regard to Tax Recognition of Alimony in Connection with a 2012

question 28

Multiple Choice

With regard to tax recognition of alimony in connection with a 2012 divorce, which one of the following statements is correct?

• A) The divorced couple may be members of the same household at the time payments are made.
• B) Payments may be made either in cash or in property.
• C) If the payor-spouse pays premiums for life insurance as a requirement under the divorce agreement, the premiums are alimony if the payor-spouse owns the policy.
• D) Payment must terminate at the death of the payee-spouse.

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Definitions:

Economic Values

The worth of goods or services determined by their utility and scarcity in relation to consumer demand.

Annuities

Financial products that pay out a fixed stream of payments to an individual, typically used as part of retirement planning.

Compounded Semi-Annually

An interest calculation method where interest is added to the principal sum of a deposit or loan at mid-year and end-of-year, resulting in interest earning interest.

Guaranteed Contract

An agreement ensuring certain terms are fulfilled, often used in the context of employment contracts guaranteeing payment.