Do I need to pay taxes on money from a divorce settlement?

Cjwagg
Cjwagg Member Posts: 3 Newcomer
edited December 26 in Live Q/A Event

I received money from my divorce settlement this year, do I need to pay taxes on it? It was from marital property.

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Answers

  • CoryF
    CoryF FreeTaxUSA Agent Posts: 115

    Thank you for joining our community, Cjwagg.

    There are some moving parts in this question. Since you mentioned that a Property was sold, there is capital gain involved that does need to be reported on an Income tax return. The property would have been settled in the divorce procedures, but the Sales Proceeds and Cost from the sale of the property would need to be separated according to the filing and the split agreed upon and reported.

    Mentioning that you received money from the settlement would need to be identified properly so that it is reported correctly on your tax return.

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  • Cjwagg
    Cjwagg Member Posts: 3 Newcomer

    the house was not sold, my ex husband just finally decided to buy me out of my part of the value of the house. Our divorce was final in 2017, he just gave me money in March so I would sign my name off the deed.

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  • CoryF
    CoryF FreeTaxUSA Agent Posts: 115

    Thank you for responding with more information.

    In this case, the money transferred to you would not be taxable. The Property was not sold and the money was given to you as a gift (constructively received) from the ex-husband.

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  • Cjwagg
    Cjwagg Member Posts: 3 Newcomer

    thank you!! My ex keeps telling me I need to pay taxes on it, but I didn’t think I did. Thank you for your time:)

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