The Intent of the Alimony Recapture Rules Is to

question 20

Multiple Choice

The intent of the alimony recapture rules is to

• A)Prevent the payee from having a large tax liability when there is not an adequate wherewithal to pay.
• B)Prevent former spouses from skipping out of their obligations to pay the other spouse.
• C)Reclassify property settlements as capital gains, rather than ordinary income.
• D)Prevent child support from being disguised as alimony.
• E)Prevent tax deductions for property settlements.

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Definitions:

Consumer Surplus

Consumer surplus is the difference between the total amount consumers are willing and able to pay for a good or service and the total amount they actually pay.

Property Rights

The legal rights to own, use, and dispose of assets including real estate, personal possessions, and intellectual property.

Producer Surplus

The difference between what producers are willing and able to sell a product for and the actual price they receive, representing the extra benefit to producers.

Consumer Surplus

The difference between the total amount that consumers are willing to pay for a good or service and the total amount they actually pay.