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Exercise 10-1 (Algorithmic) (LO. 1) Casper and Cecile divorced in 2018. As part of the divorce...

Exercise 10-1 (Algorithmic) (LO. 1)

Casper and Cecile divorced in 2018. As part of the divorce settlement, Casper transferred stock to Cecile. Casper purchased the stock for $157,500, and it had a market value of $252,000 on the date of the transfer. Cecile sold the stock for $220,500 a month after receiving it. In addition Casper is required to pay Cecile $7,875 a month in alimony. He made five payments to her during the year.

What are the tax consequences for Casper and Cecile regarding these transactions?

If an amount is zero, enter "$0".

a. How much gain or loss does Casper recognize on the transfer of the stock?
$

b. Does Casper receive a deduction for the $39,375 alimony paid?

c. How much income does Cecile have from the $39,375 alimony received?
$

d. When Cecile sells the stock, how much gain or loss does she report?
Cecile will report a   of $.

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