ExpertHard1 markMultiple Choice
CPA · Question 37 · Area IV: Individual Taxation
Which of the following is a requirement for a payment to be classified as alimony for a divorce agreement executed in Year 1 (post-2018)?
Which of the following is a requirement for a payment to be classified as alimony for a divorce agreement executed in Year 1 (post-2018)?
Answer options:
A.
The payment must be made in cash or property.
B.
The payment must continue after the death of the payee spouse.
C.
The spouses may live in the same household.
D.
The payment must be in cash.
How to approach this question
Recall alimony criteria: Cash only, Ends at death, Not same household, Not child support. (Note: Post-2018 alimony is not deductible/taxable, but the DEFINITION remains relevant for classification).
Full Answer
D.The payment must be in cash.✓ Correct
To be classified as alimony (even though it is no longer deductible/taxable for post-2018 agreements), the payment must be in cash. Property settlements do not qualify. The liability must terminate upon the death of the payee, and spouses cannot be members of the same household.
Common mistakes
Thinking property transfers can be alimony.
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