With Respect to Alimony and Property Settlements in a Divorce

question 80

Multiple Choice

With respect to alimony and property settlements in a divorce or separation,all of the following are true with the exception of

• A)a property settlement does not result in income to either spouse.
• B)no tax deduction is allowed for payment of a property settlement.
• C)the spouse receiving a property settlement has a basis equal to the basis of that property to the paying spouse prior to payment.
• D)no deduction is allowed for alimony paid to the former spouse if a property settlement is also paid.

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Definitions:

Marginal Cost

The increase in total cost that arises from producing one additional unit of a product or service.

Profit Maximized

The point at which a firm achieves the highest profit possible, considering the level of output and cost of production.

Competitive Price-Taker

An entity in a market that has no control over the prices at which its products are sold, typically due to intense competition and product uniformity.

Marginal Cost

The cost of producing one additional unit of a product.