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:

Hyperventilates

The condition of breathing at an abnormally rapid rate, leading to excessive loss of carbon dioxide.

Trachea

The windpipe; a tube that connects the pharynx and larynx to the lungs, allowing the passage of air.

Epiglottis

Structure that covers the glottis, the air-tract opening, during the process of swallowing.

Bronchioles

The small passages in the lungs that lead from the bronchi to the alveoli, involved in the process of breathing.