Practice Test 2 Wrong / Uncertain Flashcards
Common issues when calculating marital estate
Marital portion of pension, UTMA accounts, non-marital assets from gifts and inheritances.
The Child Contingency rule requires what for alimony to be recharacterized as child support?
If it is reduced on TWO or more occasions that occur less than one year before a child reaches the age of majority of the resident state.
What year was ERISA created?
74
How long does IRS have for random audit?
3 years, anytime for fraud
What is an automatic revocation statute?
automatically revokes a spouse as a beneficiary in the event of divorce. The assumption is that the decedent intended to remove the ex-spouse from the documents post-divorce but forgot to do so.
Which tax form waives custodial parent’s right to claim children as dependents?
8332 - no limit to years. part of section 152e2
How are capital losses on separately owned property allocated after divorce?
They belong to the spouse who owned the property - capital loss carry forwards are not split evenly.
In states that distinguish between marital and separate property, what value remains separate?
The value at the time of marriage - any increases in value are marital property.
Which act requires automatic withholding from qualified plans?
Unemployment Compensation Amendment of 1992
How long do you have to notify the plan administrator of a divorce to be eligible for COBRA?
60 days
What does the Uniform Services Former Spouses Protection Act do?
Permits states to divide military disposable retiree pay as marital property in the event of a divorce
Allows a former spouse to take out spousal and/or child support from the military spouse’s retired pay.
No more than 65% of a retired military member’s pension can be deducted for spousal and child support obligations.
What is the 20/20/20 rule?
It’s a qualification pertaining to division of military benefits, which requires:
Being married for 20 years
Military spouse having served for 20 years
Have 20 years of marriage that overlap the 20 years of military service.
How much is the current personal exemption amount?
0 - idiot
When can Mindy likely start receiving pension benefits if she were granted some portion of the payout as part of the divorce settlement?
In most cases, the non-employee spouse is able to start receiving pension benefits at the employee’s earliest retirement date.
In a CP state, how can the character of property be changed?
Community property can be changed by a prenuptial, transmutation (legal term that means to change form) and a post-nuptial agreement. Informal assent or behavior would not change the nature of the property.
What does the Retirement Equity Act of 1984 do?
It requires qualified plans to use a QDRO to divide the assets in a divorce.
Jim wants Karen to waive her rights to a Qualified Pre-retirement Survivor Annuity (QPSA) offered by his employer’s defined benefit plan. Jim tells Karen that if she gives up her right to this benefit, the monthly amount the plan will pay each of them when he retires at age 65 will increase about 10%. Karen comes to you for advice. Which advice should you give Karen?
If Karen waives her rights, she will not be entitled to a benefit from Jim’s defined benefit if he dies before he retires. QDRO does nothing to change that.
What will the Department of Labor (DOL) do with a recipient’s unemployment benefits when he or she has an outstanding child support payment?
The DOL will deduct the child support payments, then send the recipient the remaining unemployment wages.
How is a property settlement note taxed?
Interest from a property settlement note is taxable to the recipient.
How is property divided in an equitable distribution state?
Marital property is divided in an equitable manner.
Which statement is correct regarding the Uniform Gifts to Minors Act (UGMA) or Uniform Transfers to Minors Act (UTMA) accounts?
The account belongs to the minor after it is set up.
Paul and Mary have decided to get a divorce. Paul and Mary live in a jurisdiction that allows separate property to be used as an offset in the division of marital property. During Paul’s marriage to Mary, Paul paid child support to an ex-spouse. What must Mary establish to make a claim against Paul’s separate property?
Mary must demonstrate that marital funds were used to satisfy Paul’s non-marital obligation
Gerry lives in an equitable distribution state. He inherited $300,000 before he married Betty. At that time, they put all their assets in joint names. Now they are getting divorced and the account is worth $410,000. What is the value of the marital property?
The inheritance became marital property when it was placed in joint name.
In an equitable distribution state, how are assets brought into the marriage, which are then put into joint name treated?
They become marital property.
Sally lives in an equitable distribution state. She had a house when she got married that she kept in her name only. At that time, the house was worth $78,000 and had a mortgage of $52,000, so the equity was $26,000. Now Sally is getting divorced. Today the house, which is not their marital residence, is worth $124,000 and the mortgage balance is $38,000, so the equity has increased to $86,000. What is the net value of the marital property?
60K
Only the appreciation in equity since the marriage (86,000 - 26,000) would be marital property.
Tammy received a gift from her father of $8,500 after he sold the family cabin. She put it into a joint savings account with her husband. Now, Tammy is getting divorced and the savings account is worth $13,200. What is the value of the marital property?
$13,200
When the account was titled in joint name it was a presumptive gift to her husband.
Which state do the parties elect to have their property treated as community property
The state that has this type of property treatment is Alaska
What can the non-custodial parent qualify for in tax benefits?
Only the child tax credit, and the exemption via form 866 whatever
Section 121 residence requirement?
2/5 years, or 24 months, even if not consecutive.
Are any divorce legal fees deductible?
nope
