Glenn and Vera Divorce During the Current Year

question 107

Multiple Choice

Glenn and Vera divorce during the current year.Per their divorce agreement,Glenn receives their former personal residence valued at $180,000 with a basis of $100,000.Also,Glenn will pay Vera $5,000 annually for eight years.If Vera dies before the end of the eight years,the balance of the payments is to be paid to Vera's estate in a lump sum.The couple has not lived together for the past two years.

• A)Glenn can deduct $5,000 annually for alimony paid to Vera.
• B)Vera can deduct $40,000 (1/2 of the unrealized gain on the house).
• C)Vera does not recognize any income from the property and/or cash transactions.
• D)Vera must recognize $40,000 as a gain on the disposition of her interest in the house.
• E)Vera must recognize all the cash received as alimony income.

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Definitions:

Powerful Stakeholders

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Divergence

The process or instance of differing or deviating from a common point, often leading to variation or separation.

Vertical Thinking Method

A problem-solving approach that involves sequential steps, focusing on depth rather than breadth, and often follows a specific set of rules.

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The process of creating novel and innovative concepts or solutions, often critical for development and problem-solving in various domains.