Divorce Divorce and Taxes

Question 1

What filing status can a recently divorced person use if they were legally divorced by December 31 of the tax year?

Accepted Answer

Single

Answer

Married Filing Jointly

Answer

Married Filing Separately

Answer

Head of Household

Question 2

Under the Tax Cuts and Jobs Act of 2017, how is alimony paid under divorce agreements finalized after December 31, 2018, treated for federal income taxes?

Accepted Answer

Not deductible by the payer and not taxable to the recipient

Answer

Deductible by the payer and taxable to the recipient

Answer

Deductible by the recipient and taxable to the payer

Answer

Always exempt from federal taxes for both parties

Question 3

Which IRS form is used to report alimony received under pre-2019 divorce agreements?

Accepted Answer

Schedule 1 of Form 1040

Answer

Schedule C

Answer

Form 1099-MISC

Answer

Form W-2

Question 4

When dividing a 401(k) in a divorce, what legal document is required to avoid immediate tax penalties on the transfer?

Accepted Answer

A Qualified Domestic Relations Order (QDRO)

Answer

A standard divorce decree

Answer

A Form 1099-R filed with the IRS

Answer

A written letter from both spouses

Question 5

If a divorcing couple sells their jointly owned home, what is the maximum capital gains exclusion each individual may claim if they each meet the ownership and use tests?

Accepted Answer

$250,000 each

Answer

$125,000 each

Answer

$500,000 each

Answer

$1,000,000 each

Question 6

Child support payments received from a former spouse are treated how for federal income tax purposes?

Accepted Answer

Not taxable to the recipient and not deductible by the payer

Answer

Fully taxable as ordinary income

Answer

Partially taxable depending on the amount

Answer

Deductible by the payer only

Question 7

Which parent is generally entitled to claim a child as a dependent for tax purposes after divorce?

Accepted Answer

The custodial parent by default, unless a written agreement assigns it to the noncustodial parent

Answer

Always the parent who pays child support

Answer

The parent with the higher income

Answer

Both parents can claim the child simultaneously