As a result of their$$ divorce, MikeMike agreed to pay alimony to MarthaMartha of $ $23$ comma $000$$$23,000$ per year. The payments are to cease in the event of Mike'sMike's or Martha'sMartha's death or in the event of Martha'sMartha's remarriage. In$$ addition, MarthaMartha is to receive their$$ residence, which cost them $ $95$ comma $000$$$95,000$ but is worth $ $132$ comma $000$$$132,000.($Assume the change in tax law as of December$31,2018.)$

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Part $1$

Requirement a$.$ How will the $ $23$ comma $000$$$23,000$ payments be treated by MikeMike and MarthaMartha if covered by prior$$ law?

If the divorce was complete prior to December $31,2018,$ Mike

If the divorce was complete prior to December $31,2018,$ Martha

Part $2$

Requirement b$.$ How will the payments be treated if the divorce is covered by new$$ law?

If the divorce was complete after December $31,2018,$ Mike

If the divorce was complete after December $31,2018,$ Martha

Part $3$

Requirement c$.$ What is Martha'sMartha's basis in the$$ residence?

Martha's basis in the residence $=$

Part $4$

Requirement d$.$ What role would a tax advisor play in a$$ divorce?

A$.$

Tax advisors are responsible for making a fair recommendation to the judge on the amount of alimony that should be exchanged.

B$.$

Representatives of individuals involved in a divorce must make sure that the participants understand the after tax implications of alimony payments.

C$.$

Representatives of individuals involved in a divorce must make sure that the wronged party receives the greatest advantage in the settlement agreement.

D$.$

Tax advisors are responsible for determining the value of property given in lieu of cash for an alimony payment.