CDA Tax Implications of Divorce 2

Question 1

Under the Tax Cuts and Jobs Act (TCJA) of 2017, how is alimony treated for divorce agreements executed after December 31, 2018?

Accepted Answer

Not deductible by the payer and not taxable to the recipient

Answer

The TCJA eliminated the alimony deduction for the payer and the income inclusion for the recipient for agreements executed after December 31, 2018.

Question 2

A couple divorced in 2016 and their divorce decree specifies alimony payments. What is the current tax treatment for those payments?

Accepted Answer

They retain the pre-TCJA treatment: deductible to payer, taxable to recipient

Answer

Pre-2019 divorce agreements are grandfathered under the old rules, making alimony deductible for the payer and taxable income for the recipient.

Question 3

Which filing status can a divorced spouse use if they paid more than half the cost of maintaining a home for a qualifying child during the tax year?

Accepted Answer

Head of Household

Answer

A divorced parent who is legally single but maintains a home for a qualifying child for more than half the year can file as Head of Household, which provides a higher standard deduction.

Question 4

For a payment to qualify as alimony under pre-TCJA rules, which of the following requirements must be met?

Accepted Answer

The spouses must not live in the same household at the time of payment

Answer

One key requirement for pre-TCJA alimony treatment is that the spouses cannot be members of the same household at the time payments are made.

Question 5

What is the tax treatment of child support payments received after divorce?

Accepted Answer

Neither deductible by the payer nor taxable to the recipient

Answer

Child support payments have never been deductible by the payer or taxable to the recipient; they are considered a personal obligation.

(CDA) Certified Divorce Advisor Practice Test

(CDA) Certified Divorce Advisor Practice Test

CDA Tax Implications of Divorce 2