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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 $$90,000,$ and it had a market value of $$144,000$ on the date of the transfer. Cecile sold the stock for $$126,000$ a month after receiving it$.$ In addition Casper is required to pay Cecile $$4,500$ 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

is not

required to recognize any gain on the transfer of the stock to Cecile. Further, although he

cannot

deduct anything related to the transfer of the stock, he may deduct the $fill in the blank $3$

of alimony payments. Cecile

does not

include the receipt of the stock in her gross income. She must, however, recognize a capital

gain

of $fill in the blank $6$

when the stock is sold and

must

recognize income from the alimony payments.