CDFA Exam Study Materials Questions with Complete Solutions 2024., Exams of Business Finance

Download CDFA Exam Study Materials Questions with Complete Solutions 2024. and more Exams Business Finance in PDF only on Docsity! CDFA Exam Study Materials Questions with Complete Solutions 2024. 5-year cliff vesting - Answer- An employee who has at least five years of service must have a non- forfeitable right to 100% of the employee's accrued benefit [IRC §411(a)(2)(A)]. 3- to 7-year vesting (7-year graded vesting) - Answer- An employee who has completed at least three years of service must have a non-forfeitable right to at least the following percentages of his or her accrued benefit: 20% after three years of service, 40% after four years of service, 60% after five years of service, 80% after six years of service, and 100% after seven years of service [IRC §411(a)(2)(B)]. Top-heavy plans or matching contributions typically use _________ vesting - Answer- 3-year cliff vesting or 6-year graded vesting. Schedule A: Itemized Deductions - Answer- Schedule ____ may help identify unlisted assets or sources of income. For example, property taxes may reveal real property or a boat that one spouse does not know exists; and gambling losses would reveal that there are gambling winnings. Schedule B: Interest and Ordinary Dividends - Answer- Schedule ____ identifies the assets and investments generating interest and dividends. Schedule C: Profit or Loss from Business - Answer- Schedule ___ may be a place to hide assets or income. For example, depreciation expense is not a cash outflow and should sometimes be added back to net income to determine actual income. The depreciation schedule may also reveal additional assets in the business. Schedule D: Capital Gains and Losses - Answer- Schedule _______ is used to report gains and losses from the sale of stocks, bonds, and real estate. Schedule E: Supplemental Income and Loss - Answer- Schedule _____ is used to report income from rental properties, royalties, partnerships, and S-corporation income. Depreciation would be something to review. Form 1065 - Answer- Form _________ is used to report partnership income. Form 1120 - Answer- Form __________ is used to report corporate income Form 1120S - Answer- Form ___________ is used to report corporate income for S corporations. Schedule 1: Additional Income and Adjustments to Income - Answer- Schedule ____________________ includes additional income, such as capital gains, unemployment compensation, prize or award money, and gambling winnings. It also includes deductions such as student loan interest, self-employment tax, and educator expenses. Schedule 2 Tax - Answer- Schedule _________ details the alternative minimum tax (ATM) or an excess advance premium tax credit repayment. Schedule 3 Nonrefundable Credits - Answer- Schedule _________ is used to claim a nonrefundable credit other than the child tax credit or the credit for other dependents, such as the foreign tax credit, education credits, or general business credit. Schedule 4 Other Taxes - Answer- Schedule ___________ reports other taxes, such as self-employment tax, household employment taxes, additional tax on IRAs or other qualified retirement plans and tax- favored accounts. Schedule 5: Other Payments and Refundable Credits - Answer- Schedule _________ is used to claim a refundable credit other than the earned income credit, American opportunity credit, or additional child tax credit. Form 4562 - Answer- Form _________ reports deductions for depreciation and amortization as well as provides information on the business/investment use of automobiles and other listed property. Form 4797 - Answer- Form ___________ reports the sale or exchange of business property and the computation of recapture amounts under sections 179 and 280F(b)(2). Accountant - Answer- An __________________ is a person who is qualified to keep, audit, and inspect the financial records of individuals or business concerns and prepares financial and tax reports. Court Order - Answer- __________________________ is a written instruction from the court carrying the weight of law. ___________________ must be in writing. Anyone who knowingly violates a ____________________ can be held in contempt of court. Cross-Examination - Answer- _____________________ is the questioning of a witness presented by the opposing party on trial or at a deposition. The purpose is to test the truth of that testimony. Curriculum Vitae - Answer- _________________________ is a resume that is prepared by an expert witness to show their qualifications in their area of expertise. Decree - Answer- _______________ is the final ruling of the judge on an action for divorce, legal separation, or annulment. _______________ has the same meaning as judgment. Decree Nisi / Rule Nisi - Answer- ____________________ is an order by the court stating that a conditional divorce will become absolute by a certain date, unless a party contests the order. Default - Answer- _________________ is a party's failure to answer a complaint, motion, or petition. Defendant - Answer- ______________________ is the partner in a marriage against whom a divorce complaint is led. ________________ has the same meaning as respondent. Deposition - Answer- ____________________ is the testimony of a witness taken out of court under oath and reduced to writing. Discovery ______________ are the most common and are taken for the purpose of discovering the facts upon which a party's claim is based or discovering the substance of a witness's testimony prior to trial. The ____________________ may be used to discredit a witness if he changes his testimony. Direct Examination - Answer- _________________________________ is the initial questioning of a witness by the attorney who called him or her to the stand. Discovery - Answer- ____________________ is the procedures followed by attorneys in order to determine the nature, scope, and credibility of the opposing party's claim. __________________ procedures include depositions, written interrogatories, and notices to produce documentation relating to issues relevant to the case. Dismissal - Answer- ___________________ occurs when a party voluntarily drops the case (in some states) or when a judge finds that a case totally lacks merit. Dissolution of Marriage - Answer- _________________________ is the legal process of ending a marriage. In most states, the legal term for divorce. Domestic Violence - Answer- ___________________________ is the physical abuse of one family member by another. Evidence - Answer- ___________________ is the proof presented at a hearing, including testimony, documents, or objects. Exhibits - Answer- _____________ are the tangible things presented at trial as evidence. Expert Witness - Answer- In court proceedings, the ________________________ is the professional whose testimony helps a judge reach a decision. File/Filing - Answer- ______________________ is to place a document in the official custody of some public official. Every case brought to court must be led with the court clerk in order for the court to take action upon the case. A case is led when a party (plaintiff) writes a written complaint and brings it to the clerk, who files it. The plaintiff must also serve the opposing party with a copy of the complaint. Grounds for Divorce - Answer- ________________________ are the reasons for seeking a divorce, such as incompatibility, mental cruelty, physical abuse, or adultery. While some states allow fault ________________________, all states have some form of no-fault divorce. Guardian-ad-Litem - Answer- ____________________________ is a person appointed by a judge to prosecute or defend a case for a person legally unable to do so, such as a minor child. Hearing - Answer- ______________ is any proceeding before a judicial officer. Hearsay - Answer- __________________ is an out-of-court statement offered to prove the truth of the matter asserted. Generally speaking, __________________ cannot be used at trial, but there are exceptions that permit it to be admitted to court. Incompatibility - Answer- __________________ is the inability of persons to get along; a ground for divorce. Interest-Based Bargaining - Answer- ___________________________ is a method of negotiation used in mediation. It starts with each party educating the other party about their interests. Ideally, the parties will work together until they find solutions that allow both parties to meet their needs. Interrogatories - Answer- _______________________ is a series of written questions served upon the opposing party in order to discover certain facts regarding the disputed issues in a matrimonial proceeding. Judgment - Answer- ___________________ is the order of the court on a disputed issue; same as decree. Jurisdiction - Answer- ______________________ is the power of the court to rule upon issues relating to the parties, their children, or their property. Legal Separation - Answer- ____________________________ is the court ruling on division of property, spousal support, and responsibility to children when a couple wishes to separate but not divorce. A ________________________ is most often desired for religious or medical reasons. A decree of legal separation does not dissolve the marriage and does not allow the parties to remarry. Texas does not recognize _____________________________. Limited Divorce - Answer- ___________________________ establishes certain legal responsibilities while the parties are separated but does not end the marriage. Also referred to as legal separation. Litigation - Answer- ___________________ is the process by which a civil case settles parties' rights. Mediation - Answer- ___________________ is a non-adversarial process in which a husband and wife are assisted in reaching their own terms of divorce by a neutral third party trained in divorce matters. The mediator has no power to make or enforce decisions. ________________ differs greatly from Arbitration. Motion - Answer- _______________ is an application or request to the court for an order. May be written or verbal. Settlement Agreement - Answer- A _________________________ is a written contract dividing property, spelling out rights and obligations, and settling issues such as spousal and child support and custody. Stipulation - Answer- __________________ is an agreement between the parties or their counsel, usually related to matters of procedure. Subpoena - Answer- A __________________ is a court order requiring a person's appearance in court or at a deposition as a witness or to present documents or other evidence for a case. Summons - Answer- A ________________ is a written notification to the defendant or respondent that an action has been led against him or her. It notifies a spouse of his/her rights and obligations in responding to the Complaint for Divorce. Temporary Orders - Answer- _______________________ are orders granting relief between the ling of the lawsuit and the judgment. Temporary orders are automatic in some states. They are also called Pendente Lite Orders. Testimony - Answer- ________________ are statements under oath by a witness in a court hearing or deposition. Transcripts - Answer- _________________ is the written record of the divorce proceedings, testimony, or depositions. Trial - Answer- __________ is the time when a judge hears the contested permanent or temporary issues, with supporting evidence and witnesses, in a couple's divorce decisions. The judge may take a few hours or a few weeks to review the information presented and issue a court opinion. Uncontested Divorce - Answer- ________________________ is when the defendant is not going to try to stop the divorce and there are no issues for the court to decide about the children, money, or property. Visitation - Answer- ______________ is the right of the non-custodial parent to see the children. Increasingly, states are granting this right to grandparents and close relatives. Voir Dire - Answer- _______________ is where the opposing counsel has the opportunity to disqualify an expert witness. Writ of Summons - Answer- ___________________ is a form issued by the court directing a party to respond to a complaint, motion, or petition. Assets - Answer- ________________ are cash, property, investments, goodwill, and other items of value (as defined by state law) that appear on a balance sheet indicating the net worth of an individual or a business. Asset Inventory - Answer- ____________________ is a collection of financial data that includes information on assets and liabilities. Key documents used are the Financial Affidavit and Asset and Liability Comparison worksheet. Debt - Answer- __________ is services, money, or goods owed by one party to another. Financial Affidavit - Answer- ___________________________ is a key document used to collect financial data; in some states, it may be known as a "Financial Statement" and may use a standard form. This document becomes part of the record of documents that are led with the court. Included in the ______________________ are all income and deductions from income, all living expenses, all assets, and all liabilities. Appraisal - Answer- ______________________ is the procedure for determining the fair market value of an asset when it is to be sold or divided as part of the divorce process. Career Assets - Answer- ______________________ are tied to one's career (e.g., health insurance, stock options, retirement plans, etc.) Community Property - Answer- In ___________________ states, any property not deemed "separate" (i.e., owned before the marriage or obtained by gift or inheritance) is "community" property and will likely be subject to a 50/50 division. Equitable - Answer- ___________________ means fair; does not necessarily mean equal. Equitable Division of Property - Answer- ____________________________ is a method of dividing property based on a number of considerations (such as length of marriage, differences in age, wealth, earning potential, and health of partners involved) to achieve an equitable and fair distribution—not necessarily an equal one. Goodwill - Answer- ___________________ is the value of a business beyond its sales revenue, inventory, and other tangible assets: including prestige, name recognition, and customer loyalty. Joint Property - Answer- ________________________ is the property held in the name of more than one person. Lis Pendens - Answer- __________________ means a piece of property cannot be transferred during a pending lawsuit that may change the disposition of it once a notice has been led in the public record. Marital Property - Answer- _____________________________ is accumulated income and property acquired by the spouses during the marriage subject to equitable division by the court. States will vary on their precise definition of what is to be included in marital property, sometimes excepting property acquired by gift or inheritance. Property Settlement Note - Answer- _________________________________ is a note from the payor to the payee for an agreed-upon length of time with a reasonable interest rate. Can be collateralized. Recapture - Answer- ________________ is deductions taken in a previous year's income. Section 1041 - Answer- This section of the IRS Code states that any transfer of property between spouses during marriage (or former spouses if it is incident to divorce) is tax-free. No gain or loss is recognized and for income tax purposes, the transferee's basis and holding period in the property is the adjusted basis and holding period of the transferor. An assignment of an annuity contract is non-taxable for both the transferor spouse and the transferee spouse under this section. Separate Property - Answer- Generally considered any property owned before marriage (earned or acquired by gift or inheritance), acquired during the marriage by one partner using only that partner's separate property, or earned after a formalized agreement. This definition will vary from state to state. Tax Reform Act of 1984 - Answer- Tax Reform Act of 1984 (TRA) added Code Sec. 1041, which allows marital property to be transferred back and forth between spouses without creating any tax on the transfer. Child Contingency Rule - Answer- States that if any amount of spousal support specified in the divorce decree is reduced: (a) upon the happening of any contingency related to the child; or (b) at a time that can be clearly associated with a contingency related to the child, then the amount of the reduction will be treated as child support, rather than spousal support. These payments will be considered child support when the payments begin. (IRS Code Sec 71(c)(2)) Child Support - Answer- The amount of money paid by a non-custodial parent to the custodial parent for a child's day-to-day expenses and other special needs. Each state is required by Congress to have written child support guidelines and enforcement procedures. Child Support Guidelines - Answer- A series of mathematical formulas used to calculate the amount of child support to be paid in some cases. Congress has mandated that states adopt child support guidelines and support enforcement procedures. Custodial Parent - Answer- The parent with whom the child(ren) live the majority of the time. A distinction should be made between a Legal Guardian (who has the ability to make legal decisions on behalf of the child) and the Custodial Parent: Technically, a Legal Guardian may have no custody rights at all. Custody - Answer- Usually refers to the parent's right to (1) have a child live with that parent and (2) make decisions concerning the child. Exact meaning varies greatly in different states. The court awards custody to one parent, which is called Sole Custody, or grants Joint Custody, allowing both parents, the right to physical care, control, or direct physical supervision of the children. Garnishing - Answer- The act by which support money is obtained from the non-paying spouse's employer, who draws that amount from his/her employee's paycheck. Joint Custody - Answer- The children live with the residential custodian and visit with the non-residential parent. Both parents have an equal say in major decisions affecting the children and decisions can only be made with notice and consent. (See also "Sole Custody.") Maintenance - Answer- Same as spousal support and alimony. Modification - Answer- A change in the judgment based on a change in circumstances. Multiple-Reduction Rule - Answer- Second provision in the Child Contingency rule when there is more than one child. If spousal support payments are reduced on two or more occasions, which occur not more than one year before or after each child reaches a certain age, then it is presumed that the amount of the reduction is child support. The age at which the reduction occurs must be between 18 and 24 inclusive and must be the same for each of the children. Non-Custodial Parent - Answer- The parent with whom the children do not live the majority of the time. Physical Custody - Answer- The parent with whom the children will primarily reside. (See also "Custodial Parent.") Primary Caregiver - Answer- A factor in consideration of who should be the custodial parent, the person who usually takes care of the children. Rehabilitative Maintenance - Answer- Temporary financial support given to an ex-spouse until they are able to earn a sufficient amnancialount to support themselves. Revenue Act of 1942 - Answer- Requires certain spousal support payments to be included in the recipient spouse's income and permitted the payor spouse to deduct these payments as an itemized deduction. Section 32 Earned Income Tax Credit EITC IRC - Answer- This section of the IRS Code states that the custodial parent is entitled to an increased earned tax income credit if he or she has a qualifying child and meets the requirements. Section 71 Payments - Answer- This section of the IRS Code states that alimony and separate maintenance payments are generally taxable to the recipient and deductible from gross income by the payor. These payments can be treated as alimony for tax purposes if: No portion of the payment may be considered child support. The payment is made in cash - Answer- check, or money order. Additionally - Answer- Section 71 requires that if the payor of alimony wants to deduct alimony payments over $15,000 per year, payments must last for at least three years. If this requirement is not met, payments are subject to recapture rules. Provision of the Child Contingency Rule that states when the spousal support payments are to be reduced not more than six months before or after the date on which the child reaches 18 - Answer- 21, or the age of majority in their state. (IRS Code Sec. 71(c)(2)) Six-Month Rule - Answer- Sole Custody - Answer- The custodial parent has the power to make all decisions, both day-to-day and major decisions concerning the child's health, education, and welfare without consulting or notifying the non-custodial parent. Spousal Support - Answer- Money paid by one spouse to the other for the recipient's support following the divorce. Support may be mandated for a specific period of time (long-term or short-term) and is based on the needs of the recipient, ability to pay, and economic differences between the partners. Also called alimony or maintenance. (See also "Section 71.") Spousal Support Recapture - Answer- Under Internal Revenue Code (IRC) § 71 recapture requirements apply if excess alimony (also commonly known as "spousal support") payments are front- loaded into the first three post-separation years. Spouse - Answer- Husband or wife. Standard of Living - Answer- A factor when determining spousal support, allowing the recipient an adequate amount to maintain their current lifestyle. Tax Cuts and Jobs Act (TCJA) - Answer- The Act signed into law in December 2017, that made significant changes for individual and business taxpayers. Changes included reduction of the personal exemption to zero, increase in the standard deduction amounts and major changes to itemized deductions. Tax Reform Act of 1976 - Answer- This Act permitted spousal support to be deductible in arriving at adjusted gross income so that the tax payer who does not itemize deductions may nevertheless deduct spousal support. Bunching Deductions - Answer- Tax strategy that involves "bunching" itemized deductions so that they are high in one year and low the following year. The standard deduction can be used on the alternate year. ______________________ are the testimony of a witness taken out of court under oath and reduced to writing after discovery and prior to trial. The ____________________________ may be used to discredit a witness if he changes his testimony during trial. - Answer- depositions, deposition The judge ____________ determine qualifications of an expert witness. - Answer- does not Make sure that deductions for health insurance are correctly recorded and not double counted and that only non-reimbursed medical expenses are recorded. - Answer- Insurance Deductions Mortgage payments are not typically double counted. However, the ____________________________________________ of the payments may be double counted. - Answer- escrowed portion (property taxes and insurance) It is _______________________ responsibility to organize and coordinate discovery. - Answer- the attorney's _____________________ are the first place to look to discover hidden assets. It is a good idea to review all tax returns for the past five years. - Answer- Tax returns Beth saves $100 of her paycheck every month. She puts this money into an account under her name only, and now it is worth $2,600. At her divorce, is this money separate or marital property? - Answer- It is marital property because it was acquired during the marriage, regardless of whose name is on the account. Payment by a property settlement note is still considered division of property, so the payor _______________ deduct it from taxable income. The payee ________________ pay taxes on the principal—only on _______________. - Answer- does not, does not, the interest Calculating spousal support comes _________ the property is divided. The reason for this is that support can be based on the amount of _________________________, so it is important to look first at the property division. - Answer- after, property received A loss on the sale of a primary residence or personal vacation property _____________________ deductible. If the vacation property is a rental instead of for personal use, then the loss __________________________. - Answer- would not be, would be deductible As the interest rate _____________________, the present value of the pension will decline, and as the interest rate ___________________, the value of the pension will increase. - Answer- increases, declines For defined benefit plans, the methods can be the _________________________, ________________________, and ____________________________. - Answer- subtraction method, accrued coverture, prospective coverture If a participant is remarried at retirement, the new spouse gets all the survivor benefits unless the QDRO provides for _____________________________________________ - Answer- survivor benefits for the alternate payee (former spouse). If one spouse, pursuant to a divorce decree or separation agreement, is required to grant the other spouse the right to temporary possession of the residence, but retains title to the residence, and it is later sold, the non-occupying spouse will be treated as ____________________________________________________. - Answer- having used the residence for the period of time that the occupying spouse used the residence. Generally, taxpayers can only exclude from income one sale every two years. Exceptions include ______________________, _________________________, and _____________________________. - Answer- a change in the taxpayer's place of employment, health issues, or unforeseen circumstances. State guidelines usually rely on one of three models to determine the base amount of child support: _____________________, _______________________, or ________________. - Answer- Income Shares Model, Percentage of Income Model, or Melson Formula. The _____________ Model combines the income of both parents and the presumptive child support obligation is prorated between the parents based on their percentage of the combined income. - Answer- Income Shares Model The _______________________ Model sets support as a percentage of only the noncustodial parent's income; the custodial parent's income is not considered. - Answer- Percentage of Income The ___________________________ is a variation of the Income Shares Model, which incorporates several public policy judgments designed to ensure that each parent's basic needs are met in addition to the children's. Some child support guideline formulas also take into account the percentage of time the child spends with each parent and the amount of spousal support paid to the custodial parent. - Answer- Melson Formula Be aware that the denial of spousal support treatment is based on whether a reduction is scheduled to occur upon the happening of an event related to the child—regardless of _____________________________________. - Answer- whether the event is likely to occur. Taxpayers with at least one qualifying child can receive a child tax credit. Married couples filing jointly who make under $______________ per year and single individuals, Head of Household, or married couples filing separately who earn less than $______________ per year, will be able to take $2,000 per child as their child tax credit. - Answer- $400,000, $200,000 The regular child tax credit _________ refundable credit. However, if the taxpayer qualifies, the additional child tax credit __________________. The additional child tax credit may apply when any portion of the regular child tax credit is ________________________. The noncustodial parent may also claim the child tax credit if the requirements are met. - Answer- is not a, is refundable, disallowed, The earned income credit, Head of Household status, and childcare expenses are all claimed by the custodial parent. The non-custodial parent can only qualify for the __________________________, not any of the other benefits. - Answer- child tax credit There is no requirement that one must have ________________________ to be awarded spousal support. - Answer- minor children If either the "six-month rule" or the "multiple-reduction rule" applies, spousal support will be treated as ________________________. - Answer- child support In the case of divorce, depreciation recapture can be recaptured from ___________________________ rather than_______________________. - Answer- the transferee, the transferor Life insurance is only required if _________________________ - Answer- the judge orders it. The treatment of maintenance after the JTCA of 2017 is - Answer- Not deductible to the payer and tax- free income to the recipient. Maintenance is no longer deductible and after JTCA is no longer taxable to the recipient. What is probably the most important role a CDFA professional can play during the divorce process? - Answer- a client expectations manager Attorneys are also cognizant of _____________________ in each jurisdiction (or county) that the court or judges commonly use. - Answer- local customs The District of Columbia recognizes _______________________ marriage. - Answer- common law According to statistics, approximately how many divorce cases use the "pro se" approach to settlement? - Answer- 50% How long can a temporary order last? - Answer- There is no time limit Marital property is everything earned during the marriage even if it is _________________________________. - Answer- kept in one spouse's name During Tammy's marriage, she received gifts that included two rings, some books, an antique dresser, and $2,000 from her mother. She put the $2,000 into a joint account with her mother. Which assets are considered Tammy's separate property? - Answer- Two rings, some books, an antique dresser and $2,000. Everything Tammy received as a gift, including the joint account with her mother, is separate property Real property brought into the marriage and maintained as separate property _________ considered marital property. - Answer- is not Many states would consider property to be marital property if it had which of the following attributes? - Answer- It increased in value and was maintained as separate property. Wilma is transferring her interest in the marital residence to her former husband, Fred, by quitclaim deed. Which of the following will happen to the mortgage? - Answer- Wilma will remain liable for the mortgage on the residence. Even though Wilma's name is off the deed, it remains on the mortgage. Wilma is still liable if Fred decides to stop making the payments. If there is recapture of spousal support, how will the recapture be treated for tax purposes? - Answer- Report the excess support as taxable income in the third post-separation year. The QDRO is qualified when it has been accepted by ________________________. - Answer- the plan administrator. A taxpayer filing as Married Filing Separately does not qualify for the __________________ credit. - Answer- childcare What is the fine for withholding your Social Security number? - Answer- $50 Childcare expenses for a child without disabilities can qualify for the tax credit for child and dependent care expenses as long as the child is no older than ______. - Answer- 12, or 13 if disabled There are four basic steps to direct examination: - Answer- explain the assignment, explain procedures and assumptions, summarize work, and admit exhibits. What tax form waives the custodial parent's right to claim the children as dependents? - Answer- 8332 The _________________________ is the number of years married while earning the pension divided by the total number of years of service under the plan until retirement. - Answer- coverture fraction The Unemployment Compensation Amendment of 1992 requires what percentage of tax be withheld from a distribution from a 401(k) plan? - Answer- 20% TWIN CAN LAW is a nmemonic to help recall which states have - Answer- The states that recognize community property are Texas, Washington, Idaho, New Mexico, California Arizona, Nevada, Louisiana, Alaska, and Wisconsin When can Mindy likely start receiving pension benefits if she were granted some portion of the payout as part of the divorce settlement? - Answer- At Phil's earliest retirement age - even if he is not retired yet. In most cases, the non-employee spouse is able to start receiving pension benefits at the employee's earliest retirement date. Community property can be changed by a __________________, ___________________ (legal term that means to change form) and a _____________________________. Informal assent or behavior would not change the nature of the property. - Answer- prenuptial, transmutation (legal term that means to change form) and a post-nuptial agreement There are two major exceptions to the nonrecognition rule: it does not apply if one spouse is _________________________, and it does not apply to a transfer of ______________. - Answer- a nonresident alien, services An immediate distribution may or may not be referenced in the QDRO but it is ___________________________. - Answer- not a requirement What will the Department of Labor (DOL) do with a recipient's unemployment benefits when he or she has an outstanding child support payment? - Answer- The DOL will deduct the child support payments, then send the recipient the remaining unemployment wages How are assets divided in a community property state? - Answer- Everything that was acquired during the marriage, other than acquisitions by inheritance or gift, is divided 50/50 between the spouses. Which legal fees incurred during a divorce are deductible? - Answer- Only attorney fees for tax advice are deductible. What are depositions? - Answer- out-of-court testimony made under oath Gary is to receive $198,000 from his wife's 401(k) plan. He needs $32,000 to pay off his attorney and some debts. How much will Gary need to take out of his 401(k) plan to pay off all of his bills? - Answer- The Plan Administrator will be required to withhold 20%, so he will need a distribution of $40,000 to net 32,000. Which state do the parties elect to have their property treated as community property? - Answer- The state that has this type of property treatment is Alaska Assume that Tom violates the Six-Month Rule by stopping spousal support payments to Eva the year that Grayson reaches emancipation age. When will re-characterization of the spousal support payments take effect? - Answer- Retroactive to the beginning of the spousal support payments.