Multiple Choice
Travis and Andrea were divorced in 2016. Their only marital property consisted of a personal residence fair market value of $400,000, cost of $200,000) , and publicly-traded stocks fair market value of $800,000, cost basis of $500,000) . Under the terms of the divorce agreement, Andrea received the personal residence and Travis received the stocks. In addition, Andrea was to receive $50,000 for eight years.
I. If the $50,000 annual payments are to be made to Andrea or her estate if she dies before the end of the eight years) , the payments will qualify as alimony.
II. Andrea has a taxable gain from an exchange of her one-half interest in the stocks for Travis' one-half interest in the house and cash.
III. If Travis sells the stocks for $900,000, he must recognize a $400,000 gain.
A) Only III is true.
B) Only I and III are true.
C) Only I and II are true.
D) I, II, and III are true.
E) None of these are true.
Correct Answer:
Verified
Correct Answer:
Verified
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