TO: File FROM: Stuart Student RE: Ben (tax year 2016) Facts Ben, a single taxpayer, divorced his wife, Jennifer. Through a court settlement between Ben and his former spouse, Ben paid Jennifer for alimony and child support. The separation decree included monthly payments made to Jennifer, where Ben pays $500 in alimony and $600 in child support. Moreover, Ben was unemployed for 3 months of the year and received a total of $3,000 in unemployment benefits. During the 9 months of Ben’s employment, he paid his former spouse $9,900 and stated that $4,500 was for alimony payments and $5,400 was for child support. As a result of his unemployment and lack of sufficient payment, Ben gave Jennifer his home theatre equipment to compromise for the missed payments during 3 months of his unemployment. The theatre equipment has a basis of $6,000 and a market value of $3,300. Furthermore, Ben made $72,000 in earned income during the 9 months of his employment. Issue and Conclusion 1 Can Ben deduct the alimony payments of $500 a month from his income? Can Ben deduct the $600 of child support payments from his income? Yes, Ben is allowed to deduct the $500 of monthly alimony payments that he makes to his former spouse. No, Ben cannot deduct the $600 of monthly child support payments. Analysis 1 Alimony payments are fully deductible towards the total income of the individual making the payments and are included in the income of the individual receiving the payments. According to Sec.215(a), alimony payments are deductible towards Ben’s income. Ben can deduce the $500 of monthly alimony payments made to his former spouse in the same year in which he makes the payments. Alimony is strictly defined in Sec.71 of the Internal Revenue Code. In order for the payments to be considered alimony, such payments have to be arranged under a formal divorce agreement. Ben’s cash payments to Jennifer were ordered by the court. Second, Ben and his former spouse cannot reside under the same house, meaning that they cannot file a joint tax return. Also, Ben is not liable for any payments after the spouse’s point of death. After analysis, Ben’s cash payments of $500 are considered alimony and completely deductible. Alimony is considered a For AGI deduction, therefore it is subtracted from gross income. The former spouse would have to give Ben her identification number (S.S number) in order for Ben to insert her S.S number in his tax return for the year the payments were made Sec.215(c)(1) and Sec.215(c)(2). This will allow the IRS to confirm the alimony payments by concluding that the former spouse did indeed receive alimony payments, which is included in her gross income. This means that Ben would have a lower Adjusted Gross Income (AGI), if everything else is held equal. The fact that his AGI is lower provides a tax benefit for Ben because most itemized deductions are off of AGI floor limits. The child support that Ben p ...

1. TO: File
FROM: Stuart Student
RE: Ben (tax year 2016)
Facts
Ben, a single taxpayer, divorced his wife, Jennifer. Through a
court settlement between Ben and
his former spouse, Ben paid Jennifer for alimony and child
support. The separation decree
included monthly payments made to Jennifer, where Ben pays
$500 in alimony and $600 in child
support.
Moreover, Ben was unemployed for 3 months of the year and
received a total of $3,000 in
unemployment benefits. During the 9 months of Ben’s
employment, he paid his former spouse
$9,900 and stated that $4,500 was for alimony payments and
$5,400 was for child support. As a
result of his unemployment and lack of sufficient payment, Ben
gave Jennifer his home theatre
equipment to compromise for the missed payments during 3
months of his unemployment. The
theatre equipment has a basis of $6,000 and a market value of
$3,300. Furthermore, Ben made
$72,000 in earned income during the 9 months of his
employment.

2. Issue and Conclusion 1
Can Ben deduct the alimony payments of $500 a month from his
income? Can Ben deduct the
$600 of child support payments from his income?
Yes, Ben is allowed to deduct the $500 of monthly alimony
payments that he makes to his
former spouse.
No, Ben cannot deduct the $600 of monthly child support
payments.
Analysis 1
Alimony payments are fully deductible towards the total income
of the individual making the
payments and are included in the income of the individual
receiving the payments. According to
Sec.215(a), alimony payments are deductible towards Ben’s
income. Ben can deduce the $500 of
monthly alimony payments made to his former spouse in the
same year in which he makes the
payments. Alimony is strictly defined in Sec.71 of the Internal
Revenue Code. In order for the
payments to be considered alimony, such payments have to be
arranged under a formal divorce
agreement. Ben’s cash payments to Jennifer were ordered by the
court. Second, Ben and his
former spouse cannot reside under the same house, meaning that
they cannot file a joint tax
return. Also, Ben is not liable for any payments after the
spouse’s point of death. After analysis,
Ben’s cash payments of $500 are considered alimony and
completely deductible. Alimony is
considered a For AGI deduction, therefore it is subtracted from
gross income. The former spouse

3. would have to give Ben her identification number (S.S number)
in order for Ben to insert her S.S
number in his tax return for the year the payments were made
Sec.215(c)(1) and Sec.215(c)(2).
This will allow the IRS to confirm the alimony payments by
concluding that the former spouse
did indeed receive alimony payments, which is included in her
gross income. This means that
Ben would have a lower Adjusted Gross Income (AGI), if
everything else is held equal. The fact
that his AGI is lower provides a tax benefit for Ben because
most itemized deductions are off of
AGI floor limits.
The child support that Ben pays his former spouse during the
tax year is not deductible.
Payments made towards the care and support of a child are not
part of alimony Sec.71(c)(1) and
as a result, not allowed to be deduced during any year.
Issue and Conclusion 2
Is the $3,000 of unemployment compensation that Ben received
for the quarter, taxable?
The $3,000 of unemployment compensation is fully taxable.
Analysis 2
Ben is required to include unemployment benefits into his gross
income Sec.85(a). Any amount
of compensation that Ben received during his three months of
unemployment, relating to his
unemployment, is considered unemployment compensation

4. under law Sec.85(b). Therefore, the
$3,000 of compensation Ben received for his unemployment
during the quarter is subject to
taxation. However, Reg. Sec 1.85-1 stipulates that Ben could be
entitled to limitations that could
benefit him. Under this regulation, effective after Dec. 31,
1978, Ben’s modified adjusted gross
income would have to exceed the base amount of $20,000. Ben
earns $72,000 plus the additional
$3,000 in unemployment giving him a total of $75,000 in
modified adjusted gross income. The
difference between the modified AGI and the base is then
divided by two, which will equal to
$27,500. The rule states that Ben has to include in gross income
the lesser of the $27,500 and the
unemployment compensation. In the case of Ben, he would have
to include the entire $3,000 of
unemployment benefit. In summary, the unemployment
compensation of $3,000 is fully taxable
for Ben.
Issue and Conclusion 3
Does the theater equipment that Ben gave his former spouse as a
means of settling the three
months of not paying alimony qualify as valid alimony? If it
doesn’t qualify, should Ben
recognize a gain or loss from the transfer?
No, the transfer of theater equipment does not qualify as an
alimony payment, therefore it cannot
be treated as an alimony payment for deductibility purposes.
Ben would have to treat the transfer of property as a gift.

5. Analysis 3
One of the characteristics of alimony is that it is a cash payment
made to the spouse under a
separation decree Sec.71(b)(1). The key word here for Ben is
cash. The transfer of the equipment
is not a cash payment, instead, it is a disbursement of property.
Only cash or cash equivalents,
such as checks or money orders, are considered a valid form of
alimony. A transfer of property is
not a valid form of alimony Temp. Reg. Sec 1.71-1T(b).
Furthermore, Ben has made a transfer of property to his former
spouse. Under Sec.1041(a)(2), no
gain or loss is reported if the transfer was made to a former
spouse. The transfer, however, must
have occurred because of the divorce. A transfer of property is
determined as being caused by
the divorce if the transfer occurred within one year of the
separation or if the transfer is related to
the termination of the marriage Sec.1041(a)(2). Since Ben has
been divorced for over two years
he doesn’t meet the one-year limit. Therefore, the transfer must
be related to the termination of
the marriage in order for Ben not to recognize a gain or loss. In
order to be related to the
“cessation of the marriage”, the transfer must satisfy the two
following requirements: (1) the
transfer is made in accordance with a separation decree (2) and
the transfer occurred within six
years of the divorce Temp. Reg. 1.1041-1T, A-7.
The transfer was executed within six years of the divorce and
Ben’s reason for the transfer of the
music theater property was because of the alimony and child

6. support payments stated in the
separation decree. Based on these facts, the transfer resulted
from the divorce, therefore,
considered a gift.
Instead of Ben transferring the property to his former spouse, he
could have sold the property
himself and then forfeit the cash value to the spouse as alimony
and child support.
Issue and Conclusion 4
Since Ben fell short of the payments he was required to make
under the separation decree, how
should the total payments he made throughout the year be
divided between the alimony and the
child support?
First, Ben would have to fulfill the required child support
payments and whatever remains can be
carried over to alimony.
Analysis 4
Ben was required to make $500 monthly alimony payments and
$600 child support payments to
his former spouse. In total Ben would have to pay $6,000 in
alimony throughout the year and
$7200 in child support throughout the year. Ben only made 9
out of the 12 monthly payments,
falling short of the required amount. Ben forfeited to his former
spouse a total of $9,900 in
alimony and child support. Under Sec.7(c)(3), Ben would have
to allocate alimony payments to
child support first and then report the remaining amount under
alimony. Like in Adrio M. Baur,
TC Memo 2014-117, Ben is not entitled to deduct $4,500 in

7. alimony. He would first report
$7200 in child support and the remaining $2,700 he would
report as alimony. Similarly, In
GUTHRIE v. U.S., 19 AFTR 2d 1018 (264 F. Supp. 840)
(1967), the court affirmed that alimony
should be reduced to satisfy child support payments. The law
views the portion of payments
towards a minor child as the priority. Whatever remains can be
given, as alimony, to the wife.
Ben would owe Jennifer $3300 in alimony payments. This
revision of Ben’s tax liability would
cause Ben to report less alimony, which will inevitably reduce
his deductions and increase his
Adjusted Gross Income. With a higher AGI, Ben would have to
accumulate more miscellaneous
itemized deductions to overcome the 2% floor, as explained in
Sec 67(a). Most importantly for
Ben, he will have to pay more taxes, similar to what happened
to Adrio M. Baur in the TC Memo
2014-117. In the court ruling, Baur was not given clearance to
report the excess alimony
payments under Section 215. The defendant argued that under
Section 71, a fraction of the
payments must be allocated towards the support of the child.
Issue and Conclusion 5
Is the $72,000 of earned income that Ben received during the
year taxable, if so at what rate?
The $72,000 of earned income is fully taxable and the income is
taxed at the ordinary rate.
Analysis 5

8. Gross income is calculated by adding all of the income received
by an individual. In other words,
it is income from whatever origin Code Sec.61(a). The
definition of gross income is intentionally
broadened to include income from anywhere, from any activity.
Sources of income include
salary compensation, fringe benefits, fees, awards, winnings,
income from business, income
from investment, trade, illegal activities and many other
sources. Ben’s salary of $72,000 fits in
this category and should be included in gross income. Salary
compensation is classified as
earned income Code Sec.32(c)(2)(A)(i). Earned income or
income from services is taxed at the
ordinary rate; Ben would have to calculate the tax liability of
his salary compensation using his
current marginal tax rate. He would have to use the tax rate
schedule for Single fillers assuming
Ben doesn’t remarry or file as head of household.
Issue and Conclusion 6
How would the transfer of property (the musical theater
equipment) from Ben to his former
spouse affect Ben’s income tax.
Sec. 1041(b) explains that the transfer of the equipment must be
treated as a gift. Ben does not
recognize a gain or loss from the transfer. Moreover, Ben does
not pay any additional estate or
gift tax.
Analysis 6
Ben, the transferor, does not recognize a gain or loss from the

9. transfer of equipment. For a
transfer to be called a gift, the transferor must not expect
anything in return from his actions. Ben
cannot expect the transfer of equipment to supplant the alimony
and child support. Also, the
transferee, Jennifer, does not recognize any gain or loss when
receiving the property. The basis
for the property is the basis of $6000 when the transferor, Ben
controlled the musical theater
equipment.
According to Sec. 2503(b)(1), Ben does not include in the
year’s total gifts the first $10,000.
This means that Ben has a tax exemption for the gift of $10,000
that would cover the entire basis
of the transferred property. Consequentially, Ben is not subject
to pay any additional gift or
estate taxes from the transferred equipment.
CNL-610 Eliza D Case Study: Part Two
Directions: Throughout this course you will be reviewing a case
study about Eliza D. The information from the case study will
be used to complete several different course assignments. Read
part two of Eliza’s case study below for the completion of your
Topic 4 and 5 assignments.
Four Week Later: You receive a call from Campus Police that
Eliza was found unresponsive in her dorm room that morning
when her roommate alerted them she could not wake her from

10. sleep. Visible cuts are on both wrists, and an empty wine bottle
is beside her in the bed. Upon further searching, the police also
find a half empty bottle of Tylenol PM in the bathroom.
The roommate reports Eliza was very upset yesterday after class
when she found out two of her grades in main Engineering
classes dropped to a C average, so instead of going to tutorials,
she went to a bar and had too much to drink. The roommate said
a mutual friend called her to pick up Eliza and drive her back to
campus, which she did, and got her safely in the dorm. The
roommate said that when she left to get dinner around 9pm,
Eliza was still asleep, but when she got back around 1am, Eliza
was sitting up in bed drinking wine from the bottle and was still
visibly upset. The roommate said Eliza had been ignoring calls
from her parents all evening and called to cancel her counseling
appointment for the next day. The roommate said they turned
off the lights around 2am, and she doesn’t recall hearing Eliza
get up during the night. She called the RA and campus police
when she tried to wake Eliza at 7am to get ready for their 8am
class and saw the empty wine bottle and couldn’t get Eliza to
wake up.
Following transport to the hospital and examination, Eliza
regains consciousness and admits to you she attempted suicide
because ‘she just couldn’t take it anymore…. everything is too
hard.’ She is adamant she does not want her parents to know,
but also admits she’s not sure if she can go back to classes after
spring break.
Upon review of her case with Campus Life and Student Affairs’
personnel over residence life, Eliza is allowed back to school on
academic probation with the condition of attending tutoring
twice per week (instead of going every day, which was causing
stress); attending counseling twice per week at the University
Counseling Center; and attending alcohol education classes
once per week for the rest of the semester.
Assignments from this point: Safety Planning, Re-Assessment,
What to Consider with Notifying Family, Arrangement for
Higher Level of Care if Needed (e.g., Drinking has escalated

11. despite counseling and alcohol classes, which could indicate
higher LOC)
© 2019. Grand Canyon University. All Rights Reserved.
Rubic_Print_FormatCourse CodeClass CodeAssignment
TitleTotal PointsCNL-610CNL-610-O500CNL-610 Risk
Assessment Scenario (Obj.
5.1)100.0CriteriaPercentageUnsatisfactory (0.00%)Less Than
Satisfactory (74.00%)Satisfactory (79.00%)Good
(87.00%)Excellent (100.00%)CommentsPoints
EarnedContent70.0%Part 1: Risk Assessment
Scenario20.0%Essay omits or incompletely describes a scenario
from the case study that you believe requires a risk
assessment.Essay does not demonstrate understanding of the
topic.Essay inadequately describes a scenario from the case
study that you believe requires a risk assessment, but
description is weak and missing evidence to support claims.
Essay demonstrates a poor understanding of the topic.Essay
adequately describes a scenario from the case study that you
believe requires a risk assessment, but description is limited and
lacks some evidence to support claims. Essay demonstrates a
basic understanding of the topic.Essay clearly describes a
scenario from the case study that you believe requires a risk
assessment, and description is strong with sound analysis and
some evidence to support claims. Essay demonstrates an
understanding that extends beyond the surface of the
topic.Essay expertly describes a scenario from the case study
that you believe requires a risk assessment, and description is
comprehensive and insightful with relevant evidence to support
claims. Essay demonstrates an exceptional understanding of the
topic.Part 2: Specific Behaviors20.0%Essay omits or
incompletely describes specific behaviors that lead you to
create a risk assessment.Essay does not demonstrate
understanding of the topic.Essay inadequately describes specific
behaviors that lead you to create a risk assessment, but

12. description is weak and missing evidence to support claims.
Essay demonstrates a poor understanding of the topic.Essay
adequately describes specific behaviors that lead you to create a
risk assessment, but description is limited and lacks some
evidence to support claims. Essay demonstrates a basic
understanding of the topic.Essay clearly describes specific
behaviors that lead you to create a risk assessment, and
description is strong with sound analysis and some evidence to
support claims. Essay demonstrates an understanding that
extends beyond the surface of the topic.Essay expertly describes
specific behaviors that lead you to create a risk assessment, and
description is comprehensive and insightful with relevant
evidence to support claims. Essay demonstrates an exceptional
understanding of the topic.Part 3: Assessment (CACREP
2.F.7.c)30.0%Essay omits or incompletely describes how you
would assess Eliza including questions you would ask to
determine the client’s level of risk, and protocol you would
follow based on the client’s answers including
documentation.Essay does not demonstrate understanding of the
topic.Essay inadequately describes how you would assess Eliza
including questions you would ask to determine the client’s
level of risk, and protocol you would follow based on the
client’s answers including documentation, but description is
weak and missing evidence to support claims. Essay
demonstrates a poor understanding of the topic.Essay
adequately describes how you would assess Eliza including
questions you would ask to determine the client’s level of risk,
and protocol you would follow based on the client’s answers
including documentation, but description is limited and lacks
some evidence to support claims. Essay demonstrates a basic
understanding of the topic.Essay clearly describes how you
would assess Eliza including questions you would ask to
determine the client’s level of risk, and protocol you would
follow based on the client’s answers including documentation,
and description is strong with sound analysis and some evidence
to support claims. Essay demonstrates an understanding that

13. extends beyond the surface of the topic.Essay expertly describes
how you would assess Eliza including questions you would ask
to determine the client’s level of risk, and protocol you would
follow based on the client’s answers including documentation,
and description is comprehensive and insightful with relevant
evidence to support claims. Essay demonstrates an exceptional
understanding of the topic.Organization and
Effectiveness20.0%Thesis Development and Purpose7.0%Paper
lacks any discernible overall purpose or organizing claim.Thesis
and/or main claim are insufficiently developed and/or vague;
purpose is not clear.Thesis and/or main claim are apparent and
appropriate to purpose.Thesis and/or main claim are clear and
forecast the development of the paper. It is descriptive and
reflective of the arguments and appropriate to the
purpose.Thesis and/or main claim are comprehensive. The
essence of the paper is contained within the thesis. Thesis
statement makes the purpose of the paper clear.Argument Logic
and Construction8.0%Statement of purpose is not justified by
the conclusion. The conclusion does not support the claim
made. Argument is incoherent and uses noncredible
sources.Sufficient justification of claims is lacking. Argument
lacks consistent unity. There are obvious flaws in the logic.
Some sources have questionable credibility.Argume nt is
orderly, but may have a few inconsistencies. The argument
presents minimal justification of claims. Argument logically,
but not thoroughly, supports the purpose. Sources used are
credible. Introduction and conclusion bracket the
thesis.Argument shows logical progression. Techniques of
argumentation are evident. There is a smooth progression of
claims from introduction to conclusion. Most sources are
authoritative.Clear and convincing argument presents a
persuasive claim in a distinctive and compelling manner. All
sources are authoritative.Mechanics of Writing (includes
spelling, punctuation, grammar, language use)5.0%Surface
errors are pervasive enough that they impede communication of
meaning. Inappropriate word choice and/or sentence

14. construction are used.Frequent and repetitive mechanical errors
distract the reader. Inconsistencies in language choice
(register), sentence structure, and/or word choice are
present.Some mechanical errors or typos are present, but are not
overly distracting to the reader. Correct sentence structure and
audience-appropriate language are used.Prose is largely free of
mechanical errors, although a few may be present. A variety of
sentence structures and effective figures of speech are
used.Writer is clearly in command of standard, written,
academic English.Format10.0%Paper Format (use of
appropriate style for the major and assignment)5.0%Template is
not used appropriately or documentation format is rarely
followed correctly.Appropriate template is used, but some
elements are missing or mistaken. A lack of control with
formatting is apparent.Appropriate template is used. Formatting
is correct, although some minor errors may be
present.Appropriate template is fully used. There are virtually
no errors in formatting style.All format elements are
correct.Documentation of Sources (citations, footnotes,
references, bibliography, etc., as appropriate to assignment and
style)5.0%Sources are not documented.Documentation of
sources is inconsistent or incorrect, as appropriate to
assignment and style, with numerous formatting errors.Sources
are documented, as appropriate to assignment and style,
although some formatting errors may be present.Sources are
documented, as appropriate to assignment and style, and format
is mostly correct.Sources are completely and correctly
documented, as appropriate to assignment and style, and format
is free of error.Total Weightage100%
Memo
to
file

15. To:
File
From:
Paul
Panther
Client:
Ben
Subject:
Divorce
decree
Facts
“Ben
and
Jennifer
were
divorced
two
years
ago
and
the
decree
stated

16. that
Ben
was
to
make
monthly
payments
to
Jen.
The
court
designated
$500
a
month
as
alimony
and
$600
per
month
as
child
support.
Ben
was
unemployed
for
a
quarter
of
the
year
and

17. paid
Jen
$
9,900
during
the
time
he
was
employed.
He
said
$5,400
was
for
child
support
and
$4,500
was
alimony.
In
addition,
Ben
transferred
home
theatre
equipment
to
Jen
with
a
FMW
of

18. $
3,300
and
a
basis
of
$6,000
in
exchange
for
her
promise
not
to
pursue
any
claim
against
him
for
unpaid
child
support
and
alimony.
During
his
three
months
of
unemployment
Ben
collected
$3,000

19. of
unemployment
benefits.
He
earned
$72,000
in
salary
for
the
nine--‐ month
period
of
employment.”
Issue
and
Conclusion
Can
Jennifer
accept
the
home
theatre
equipment
as
payment
for
the
unpaid

20. child
support
and
alimony?
Yes,
if
she
agrees
with
the
method
of
payment
then
it
is
possible.
Analysis
of
conclusion
A
former
spouse
can
agree
to
receive
property

21. as
a
form
of
alimony
payment
over
a
written
agreement
of
promise.
If
Jennifer
is
comfortable
with
the
offer
and
does
not
plan
to
pursue
any
claim,
she
can
use
the
written
agreement
as

22. proof
to
the
IRS
the
method
of
payment.
Issue
and
conclusion
What
if
Jennifer
were
to
disagree
with
that
offer
and

23. decided
that
Ben
made
more
than
enough
money
over
the
year
to
give
her
the
remaining
unpaid
child
support
and
alimony.
Would
it
be
possible
to
pursue
any
claim
against
him?
Yes,

24. because
his
income
is
above
the
threshold
and
being
unemployed
for
3
months
does
not
give
him
the
right
to
not
pay.
Analysis
of
conclusion
Alimony
is
calculated
based

25. on
the
spouse
ability
to
pay
and
the
need
of
the
depending
spouse.
Since
Ben
made
$72,000
in
salary
for
that
year,
he
therefore
qualify
to
pay
the
unpaid
amount.
Issue
and

26. conclusion
Can
Ben
decided
what
portion
of
the
money
is
child
support
and
what
is
alimony?
No
Analysis
of
conclusion
If
payment
are
required
for
both
alimony
and

27. child
support
by
the
court
decree,
then
payments
are
first
applied
to
child
support
and
the
remaining
is
alimony.
The
law
says
that
when
a
minor
child
is
involve
in
a
divorce,
the
need

28. of
the
child
come
first
over
all
else.
Therefore
Ben
did
not
have
the
authority
to
decide
what
portion
of
the
money
goes
to
what.