Nell and Kirby are in the process of negotiating their divorce agreement, to be finalized in 2021. What should be the tax consequences to Nell and Kirby if the following, considered individually, became part of the agreement?

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a. In consideration for her one-half interest in their personal residence, Kirby will transfer to Nell stock with a value of $200,000 and $50,000 of cash. Kirby's cost of the stock was $150,000, and the value of the personal residence is $500,000. They purchased the residence three years ago for $300,000.

The transfer of

only the property, only the cash, both the cash and property

is a nontaxable event.

Nell's basis for the stock is __________

Kirby's basis in the house is ___________

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b. Nell will receive $1,000 per month for 120 months. If she dies before receiving all 120 payments, the remaining payments will be made to her estate.

Only if the payments are classified as alimony, Only if the payments are classified as a property settlement, Regardless of the classification as alimony or property settlement, the payments are excluded from Nell's gross income as they are received by her, and Kirby may not deduct the payments.

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c. Nell is to have custody of their 12-year-old son, Bobby. She is to receive $1,200 per month until Bobby (1) dies or (2) attains age 21 (whichever occurs first). After either of these events occurs, Nell will receive only $300 per month for the remainder of her life.

The monthly payments are considered

child support, alimony, part child support and part alimony.

Only if the payments are classified as alimony, Only if the payments are classified child support, Regardless of the classification of the payments as child support or alimony, the payments are excluded from Nell's gross income as they are received by her, and Kirby may not deduct the payments.