Exercise $4-25($LO$.4)$

Casper and Cecile divorced in $2018.$ As part of the divorce settlement, Casper transferred stock to Cecile. Casper purchased the stock for $$25,000,$ and it had a market value of $$43,000$ on the date of the transfer. Cecile sold the stock for $$40,000$ a month after receiving it$.$ In addition, Casper is required to pay Cecile $$1,500$ a month in alimony. He made five payments to her during the year.

By how much will each of the above transfers and transactions impact Casper's AGI? Cecile's AGI?

Casper $$ required to recognize any gain on the transfer of the stock to Cecile. Further, although he $$ deduct anything related to the transfer of the stock, he may deduct the $ $($ of alimony payments. Cecile does not $$ include the receipt of the stock in her gross income. She must, however, recognize a capital $$ of $

$$ when the stock is sold and must $,$ recognize income from the alimony payments.