Tim and Janet Were Divorced

question 67

Multiple Choice

Tim and Janet were divorced.Their only marital property was a personal residence with a value of $120,000 and cost of $50,000.Under the terms of the divorce agreement, Janet would receive the house and Janet would pay Tim $15,000 each year for 5 years, or until Tim's death, whichever should occur first.Tim and Janet lived apart when the payments were made to Tim.The divorce agreement did not contain the word "alimony."

• A)Tim must recognize a $35,000 [$60,000 - 1/2($50,000)] gain on the sale of his interest in the house.
• B)Tim does not recognize any income from the above transactions.
• C)Janet is not allowed any alimony deductions.
• D)Janet is allowed to deduct $15,000 each year for alimony paid.
• E)None of the above.

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Definitions:

Erikson's Theory

A psychoanalytic theory of human development proposed by Erik Erikson, emphasizing eight stages of psychosocial development throughout the lifespan.

Human Consciousness

Refers to the awareness or perception of oneself and the environment, including thoughts, feelings, and sensations.

Unconscious Forces

Psychological factors that influence behavior and decision-making without an individual's conscious awareness, as theorized in psychoanalytic psychology.

Psychosocial Development

Psychosocial development refers to the theory originated by Erik Erikson that describes how individuals develop social and emotional skills across eight stages from infancy to adulthood.