Question :
51. Richard and Alice divorced and under the terms of their : 1313498
51. Richard and Alice are divorced and under the terms of their written divorce agreement signed on December 30, 2007, Richard was required to pay Alice $1,500 per month of which $700 was designated as child support. He made 12 such payments in 2014. Additionally, Richard voluntarily paid Alice $1,200 per month for 12 months of 2014, no portion of which was designated as child support. Assuming that Alice has no other income, her tax return for 2014 should show gross income of:
a. $0
b. $9,600
c. $10,800
d. $18,000
e. None of the above
52. Steve and Laura were divorced in 2008. Laura pays Steve alimony of $1,200 a month. The payment amount was agreed upon in the decree of divorce. To save money, Steve and Laura still live together. Are the alimony payments that Steve receives in 2014 includable in his income? Can Laura take a deduction for alimony paid?
a. Yes, the payments meet all alimony payment requirements.
b. Yes, alimony is always taxable.
c. No, only some of it is tax-exempt because Laura pays Steve too much alimony.
d. No, since Steve and Laura still live together, the payments are not considered alimony.
e. Yes, alimony payments are not tax-exempt.
53. Roger is required under a 2004 divorce decree to pay $200 of alimony and $500 of child support per month for 12 years. In addition, Roger makes a voluntary payment of $100 per month. How much of the total monthly payment is deductible by Roger?
a. $0
b. $200
c. $500
d. $600
e. None of the above
54. Laura and Leon were granted a divorce in 2005. In accordance with the decree, Leon made the following payments to Laura in 2014:
Child support payments contingent on the age of the child$4,000
Annual cash payments, other than child support, specified as alimony in the divorce agreement$6,000
How much should Laura include in her 2014 taxable income as alimony?
a. $0
b. $4,000
c. $6,000
d. $10,000
e. None of the above
55. For divorces after 1984, which of the following statements about alimony payments is not correct?
a. The payments must be in cash and must be received by the spouse (or former spouse)
b. Divorced or legally separated parties can be members of the same household at the time the payments are made
c. The payor must have no liability to make payments for any period following the death of the spouse receiving the payments
d. The payments must not be designated in the written agreement as anything other than alimony
56. Marie had a good year. She received the following prizes and awards:- an iPad from The Oprah Show with a fair market value of $500- lottery winnings of $1,000 received in cash- a plaque worth $25 plus $100 of Godiva chocolate in recognition for 100 days on the job without an accident- a $10,000 cash prize from American IdolHow much of her prizes and awards should Marie report on her tax return?
a. None, they are all excluded from income
b. $11,000; only cash prizes and awards are included
c. $11,500; the award from her job is excluded
d. $11,700; the plaque may be excluded
e. $11,725; everything is included at the highest amount
57. Which of the following gifts or prizes would be considered taxable income to the person receiving the gift?
a. $5,000 given to the taxpayer by his friend
b. A mobile home given to the taxpayer by his mother
c. A ski boat won by the taxpayer on the Price is Right
d. A Mustang GT given to the taxpayer by his brother
e. None of the above would be considered taxable
58. Richard, who retired on April 30, 2014, receives a monthly employee annuity benefit of $1,400 payable for life, beginning May 1, 2014. During his years of employment, Richard contributed $29,400 to the company’s plan. Richard’s age on May 1 is 66. Using the simplified method, how much of the annuity payment amounts received during 2014 ($11,200) may Richard exclude from gross income?
a. $427
b. $1,120
c. $1,680
d. $11,200
e. None of the above
59. Sam died on January 15, 2004 and left his wife, Terry, an insurance policy with a face value of $100,000. Terry elected to receive the proceeds over a 10-year period ($10,000 plus interest each year). This year Terry receives $11,500 ($10,000 proceeds plus $1,500 interest) from the insurance company. How much income must Terry report from this payment?
a. $0
b. $500
c. $1,500
d. $11,500
e. None of the above
60. Seymore named his wife, Penelope, the beneficiary of a $100,000 insurance policy on his life. The policy provided that, upon his death, the proceeds would be paid at a rate of $4,000 per year plus interest over a 25-year period. Seymore died June 25, 2013, and in 2014 Penelope received a payment of $5,200 from the insurance company. What amount should she include in her gross income for 2014?
a. $200
b. $1,200
c. $4,000
d. $5,200
e. None of the above
