Tim and Janet Were Divorced in 2018

question 71

Multiple Choice

Tim and Janet were divorced in 2018. 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 these.

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Definitions:

Classical Conditioning

The acquisition of knowledge through the linkage between a stimulus found in the environment and one that happens naturally.

Resistance to Extinction

The resistance to disappearance of a conditioned response despite the lack of reinforcement.

Text Messages

Written messages sent or received over mobile phones or similar devices, utilizing short message service (SMS) technology.

Ex-girlfriend

Denotes a woman with whom one has had a romantic relationship in the past, but is no longer involved with in the present.