Tim and Janet Were Divorced

question 32

Multiple Choice

Tim and Janet were divorced.Their only marital property was a personal residence with a value of $100,000 and cost of $40,000.Under the terms of the divorce agreement,Janet would receive the house and Janet would pay Tim $10,000 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 $30,000 [$50,000 - 1/2($40,000)] gain on the sale of his interest in the house.
• B)Tim does not recognize any income from the above transactions.
• C)Janet is allowed to deduct $10,000 each year for alimony paid.
• D)Janet is not allowed any alimony deductions.
• E)None of the above.

---

Definitions:

Security and Safety Needs

Basic human requirements that include the need for personal safety, protection from physical harm, and assurance of one's health and well-being.

Abraham Maslow

A psychologist known for creating Maslow's hierarchy of needs, a theory in psychology proposing a five-tier model of human needs, from physiological to self-actualization.

Casual Listening

An informal way of listening without active concentration or deep analysis.

Counselors

Professionals who provide guidance and advice in various fields, including education, health, and psychological well-being.