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Dick and Jane Are Divorced in 2015

question 54

Essay

Dick and Jane are divorced in 2015.At the time of the divorce,Dick had a lawsuit pending.He had filed suit against a former employer for overtime pay.As part of a divorce agreement,Dick agreed to pay Jane one-half of the proceeds from the lawsuit.In 2016,Dick collected $250,000 from the former employer and paid Jane $125,000.What are the tax consequences for Dick receiving the $250,000 and then paying Jane the $125,000?


Definitions:

Skeletal Muscle

a muscle that is connected at either or both extremities with a bone and so move parts of the skeleton; characterized by striated fibers.

Central Nervous System (CNS)

The part of the nervous system that consists of the brain and spinal cord, responsible for processing and sending out neural signals.

Physical Medicine

A branch of medicine that aims to enhance and restore functional ability and quality of life to those with physical impairments or disabilities.

Abbreviation

A contracted version of a word or phrase.

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