The IRS Does Not Consider Property Settlements in Consideration of Marriage

question 54

Essay

The IRS does not consider property settlements in consideration of marriage as being transfers for valuable consideration. Consequently, such prenuptial settlements are subject to the Federal gift tax. Why, then, are property settlements incident to divorce exempt from the gift tax?

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Definitions:

FOH Budget Variance

The difference between the actual factory overhead costs and the budgeted or standard overhead costs allocated for a period.

Labor Efficiency Variance

The difference between the actual hours worked and the expected hours worked, valued at the standard labor rate.

Labor Rate Variance

The variance between the real labor cost and the anticipated (or norm) cost, calculated based on the working hours.

Materials Quantity Variance

A calculation of the difference between actual material usage and expected usage in production, multiplied by the standard cost for each unit.