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Wilma and Barney's tax transactions for the boat

Wilma divorced Barney last year. This year she received the title to their boat that cost $45,000 and is now worth $55,000. Barney paid Wilma $1,500 per month, $500 for alimony and $1,000 for support of their two children. Wilma owed $60,000 to the bank for a loan on a failed business. To satisfy the debt, she transferred title of the boat to the bank and paid an additional $5,000. What are the tax consequences of these transactions for Barney and Wilma?

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If the title to the boat was a transfer incident to divorce (part of the property settlement), there are no tax consequences to either of them as a ...

Solution Summary

For Wilma and Barney, what are the tax consequences of transactions relating to the boat and other issues after their divorce.