Exercise 4-23 (Algorithmic) (LO. 4)

Casper and Cecile divorced in 2018. As part of the divorce settlement, Casper transferred stock to Cecile. Casper purchased the stock for $85,000, and it had a market value of $136,000 on the date of the transfer. Cecile sold the stock for $119,000 a month after receiving it. In addition Casper is required to pay Cecile $4,250 a month in alimony. He made five payments to her during the year.

What are the tax consequences for Casper and Cecile regarding these transactions?

If an amount is zero, enter "$0".

a. How much gain or loss does Casper recognize on the transfer of the stock? $

b. Does Casper receive a deduction for the $21,250 alimony paid?

c. How much income does Cecile have from the $21,250 alimony received? $

d. When Cecile sells the stock, how much does she report? Cecile will report a of $.