Carolyn,who earns $400,000,is required to pay John,her ex-husband,$200,000 as part of the property settlement as a result of their divorce.In turn,John transfers stock worth $50,000 to Carolyn.What is the amount of Carolyn's adjusted gross income for the year?

Question

Quizplus · Accepted Answer

C)Neither the transfer of cash to John nor the transfer of stock to Carolyn are taxable events.Thus,only the $400,000 salary is included in Carolyn's adjusted gross income.

Carolyn,who Earns $400,000,is Required to Pay John,her Ex-Husband,$200,000 as Part