Which of the Following Statements About Divorce Settlements Is False

question 28

Multiple Choice

Which of the following statements about divorce settlements is false?

• A) Alimony received under a pre-2019 divorce decree is excluded from the recipient's gross income.
• B) Child support is excluded from the recipient's gross income.
• C) Alimony received under a pre-2019 divorce decree is an above-the-line deduction for the payer.
• D) None of the above is false.

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Definitions:

Dividend-payout Policy

A company's approach to distributing earnings to its shareholders, either in the form of cash dividends or stock repurchases.

Marginal Tax Bracket

The tax rate that applies to the last dollar of the taxpayer's income, indicating the rate at which additional income will be taxed.

After-tax Return

The profit from an investment after all taxes have been subtracted, indicating the net gain to the investor.

Time Horizons

The length of time over which an investment is expected to be held before it is liquidated, ranging from short-term to long-term periods.