FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Exercise 4-23 (Algorithmic) (LO. 4)
Casper and Cecile divorced in 2018. As part of the divorce settlement, Casper transferred stock to Cecile. Casper purchased the stock for
$130,000, and it had a market value of $208,000 on the date of the transfer. Cecile sold the stock for $182,000 a month after receiving it.
In addition Casper is required to pay Cecile $6,500 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 $32,500 alimony paid?
c. How much income does Cecile have from the $32,500 alimony received?
$4
d. When Cecile sells the stock, how much does she report?
Cecile will report a
of $
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Transcribed Image Text:Exercise 4-23 (Algorithmic) (LO. 4) Casper and Cecile divorced in 2018. As part of the divorce settlement, Casper transferred stock to Cecile. Casper purchased the stock for $130,000, and it had a market value of $208,000 on the date of the transfer. Cecile sold the stock for $182,000 a month after receiving it. In addition Casper is required to pay Cecile $6,500 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 $32,500 alimony paid? c. How much income does Cecile have from the $32,500 alimony received? $4 d. When Cecile sells the stock, how much does she report? Cecile will report a of $
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