Question: Erica and Raphael are divorced during the current year. Because Erica made millions in the record industry while Raphael served as the homemaker and primary

Erica and Raphael are divorced during the current year. Because Erica made millions in the record industry while Raphael served as the homemaker and primary caretaker of baby Dexter, Erica agrees to give Raphael 20% of the stock in her record business. The fair market value of the stock is $1,200,000. Instead of paying alimony to Raphael, Erica agrees to hire him as a handyman for five years at a salary of $190,000 per year. Raphael's position has no stated responsibilities. Raphael has custody of baby Dexter. Discuss the tax implications of these arrangements.

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