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:

Cost of Living

Refers to the amount of money needed to cover basic expenses such as housing, food, taxes, and healthcare in a certain place and time.

Poverty Threshold

The minimum level of income deemed adequate in a particular country, determining who is classified as poor.

Poverty Rate

The percentage of the population with incomes below the poverty threshold.

Poverty Threshold

The minimum level of income deemed necessary to achieve an adequate standard of living in a given country.