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20 March, 06:11

Casper and cecile are divorced this year. as part of the divorce settlement, casper transferred stock to cecile. casper purchased the stock for $25,000, and it had a market value of $43,000 on the date of the transfer. cecile sold the stock a month after receiving it for $40,000. in addition casper is required to pay cecile $1,500 a month in alimony. he made five payment to her during the year. what are the tax consequences for casper and cecile regarding these transactions? if an amount is zero, enter "$0".

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  1. 20 March, 06:53
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    Separate maintenance payments and alimony are deductible by the party creating the payments and are includible in the gross income of the party getting the payments. Therefore, income is shifted from the income earner to the income beneficiary, who is better able to pay the tax on the amount received.
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