random from practice test II Flashcards
(14 cards)
How long does the IRS have to perform a random audit of a joint tax return?
3 years
What type of bankruptcy allows you to preserve your assets and pay-off some of your debts over a 3 year period and discharge the rest of your debts?
chapter 13
Jill lives in a state that distinguishes between marital and separate property. She brought a $3,400 savings account into the marriage. During the marriage, she added $100 per month for 4 1/2 years to her savings account, which she kept in her name. Jill and Tom are getting divorced, the account, which averaged earnings of 5% per year, is worth $10,277. What is the value of Jill’s separate property?
3400.
Only the amount at the time of marriage would remain separate propert as the increase in value and contributions would be marital property
Which of the following describes the relationship between child support and spousal support?
As spousal support increases, child support decreases.
Mindy’s living expenses excluding the mortgage come out to $3,250 per month. Based on the case facts, what is Mindy’s need in spousal support in the first year?
for this one, add up all the living expenses. look at her income and calculate the shortfall.
When can Mindy likely start receiving pension benefits if she were granted some portion of the payout as part of the divorce settlement?
At Phil’s earliest retirement age – even if he is not retired yet.
In most cases, the non-employee spouse is able to start receiving pension benefits at the employee’s earliest retirement date.
Identifying career assets usually requires investigation. Which of the following sources of information is the LEAST likely to help identify career assets?
Paystub
Career assets are only likely to be reflected on a paystub if there has been action such as a stock option exercise, the other three options are more likely to provide assistance in locating career assets.
In a community property state, the character of property can be changed by all of the following mechanisms EXCEPT
informal assent and behavior.
What process uses a neutral person to work out solutions for the divorcing parties?
mediation
Although an arbitrator should be neutral and there can be financial neutrals in Collaborative Practice, the resolution method that uses a neutral third party to work out solutions is mediation. Arbitration does not work out solutions, the solutions are imposed on the parties involved.
Matt transferred his business car, for which he had taken accelerated depreciation, to Sheila. Sheila did not use the car in her business. Are there any tax consequences upon transfer of the car?
Sheila will be subject to recapture for the excess depreciation.
Depreciation recapture. When certain depreciable property is transferred, the transferor is generally required to recapture the depreciation deducted in previous years or the year it is transferred. However, in a divorce the transferee and not the transferor may be subject to recapture.
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.
Which legal fees incurred during a divorce are deductible?
Only attorney fees for tax advice are deductible. NOT for the divorce
What are depositions?
They are out-of-court testimony made under oath
