General Principles Ch 7 Flashcards
For divorce is finalized after December 31, 2018, alimony _______ be deductible by the payor nor includable in the gross income of the payee.
Will not
Any payments made to maintain property _______ by the payor are not alimony.
Owned
Only life insurance premiums on the _________ spouse qualify as alimony.
Payor
Payments that continue after the payee spouse’s death are considered _________.
Child support
Tuition payments on behalf of the payee spouse qualify as _______ if made pursuant to the divorce instrument.
Alimony
The 1984 tax act provides that any transfer of property between spouses incident to a divorce is ________.
Gift tax-free
With the transfer of property between spouses due to divorce, the transferor’s basis in the property ______ “ carried over” to the transferee.
Is
True or false:
There is no step-up in basis in divorce settlements.
True
The best transfer of property arrangements for the exam for unmarried domestic partners are ____________.
Revocable trust and tenancy in common
Under COBRA, employers providing group or self funded health coverage are required to offer terminated employees the right to buy continued health coverage. Small companies with fewer than _____ employees are exempt from the federal legislation.
20
COBRA
Qualifying event:
voluntary or involuntary termination; change from full-time to part-time
Coverage must be offered to:
Terminated employees and other dependents
Continuation period:
Up to _________.
18 months
COBRA
qualifying event:
Employee’s death, divorce, legal, separation, or eligibility for Medicare
Coverage must be offered to:
______________
Continuation period:
Up to 36 months
Spouses and other dependents
COBRA
Qualifying event:
LOSS OF DEPENDENT STATUS (marriage, reaching dependency age limit specified by plan)
Coverage must be offered to:
Dependents whose status changed
Continuation period:
________
Up to 36 months
A ___________ is a voluntary agreement between the personal injury victim and the defendant who was deemed to be negligent.
Injury victims will receive a stream of ________ payments, perhaps tailored to meet future medical expenses and living needs.
Structured settlement / tax-free
___________
___________ Damages received because of personal physical injuries or physical sickness are generally tax-free. However, interest paid on a tax free damage award is _________.
Compensatory / taxable
Damages received in discrimination or other non-physical injury cases are _______ with one exception: damages up to the amount of actual medical care, expenses attributable to emotional distress, like psychiatric care _________.
Taxable / tax-free
_______ damages, generally are taxable, regardless of the nature of the claim.
Punitive
Damages paid to a beneficiary in conjunction with wrongful death or received ________.
Tax-free
_______ represents federal taxation and spending designed to level out the business cycle and achieve full employment, price stability, and sustained growth in the economy. It is independent of monetary policy.
Fiscal policy