Question

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 $167,500, and it had a market value of $268,000 on the date of the transfer. Cecile sold the stock for $234,500 a month after receiving it. In addition Casper is required to pay Cecile $8,375 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 $41,875 alimony paid? Yes c. How much income does Cecile have from the $41,875 alimony received? $ d. When Cecile sells the stock, how much gain or loss does she report? Cecile will report a loss of $ .

Answer 1

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