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
$67,500, and it had a market value of $108,000 on the date of the transfer. Cecile sold the stock for $94,500 a month after receiving it. In
addition Casper is required to pay Cecile $3,375 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 $16,875 alimony paid?
Yes
c. How much income does Cecile have from the $16,875 alimony received?
d. When Cecile sells the stock, how much does she report?
Cecile will report a gain
-v of $
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Transcribed Image Text:Main.do?invoker=&takeAssignmentSessionLocator=&inprogress=false no еВook 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 $67,500, and it had a market value of $108,000 on the date of the transfer. Cecile sold the stock for $94,500 a month after receiving it. In addition Casper is required to pay Cecile $3,375 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 $16,875 alimony paid? Yes c. How much income does Cecile have from the $16,875 alimony received? d. When Cecile sells the stock, how much does she report? Cecile will report a gain -v of $ Feedback Check My Work When a married couple divorce or become legally separated, state law generally requires a division of the property accumulated during the Previous Next Check My Work 7:09 PM 32°F Winter Storm 1/16/202
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