Will the settlement be taxed? How? 11 Answers as of August 27, 2015

My wife and I are going through our divorce settlement. If my wife is supposed to receive a large portion of money through our divorce settlement, will that money be taxed?

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Law Offices of Arlene D. Kock
Law Offices of Arlene D. Kock | Arlene D. Kock
If these resources consist of a community property division ,there is no tax.
Answer Applies to: California
Replied: 6/5/2015
Ronald K. Nims LLC | Ronald K. Nims
Probably not. Usually large settlements in divorce is splitting up the property. Those payments are not taxable. Only alimony payments are taxable to the recipient and deductible to the payor.
Answer Applies to: Ohio
Replied: 6/5/2015
Law Offices of Robert Burns
Law Offices of Robert Burns | Robert Burns
It depends. Ask her attorney.
Answer Applies to: California
Replied: 6/4/2015
Richard B. Jacobson & Associates, LLC | Richard B. Jacobson
Usually she will not be taxed at the time of the transfer. However, there are exceptions to every rule, especially in tax law. So consult an experienced tax lawyer or CPA.
Answer Applies to: Wisconsin
Replied: 6/4/2015
GordenLaw, LLC
GordenLaw, LLC | Vanessa J. Gorden
It depends. If it is characterized as alimony, then yes, it is taxable.
Answer Applies to: Nebraska
Replied: 6/4/2015
    Irsfeld, Irsfeld & Younger LLP | Norman H. Green
    No income; no deduction.
    Answer Applies to: California
    Replied: 6/4/2015
    Law Offices of Helene Ellenbogen, P.S.H | Helene Ellenbogen
    NO. This is neither capital gains nor income. It is a division to give her a portion of what is already hers.
    Answer Applies to: Washington
    Replied: 6/4/2015
    Law Office of Robert E McCall | Robert McCall
    Impossible to say without an examination of the documents. Usually equitable distribution is not taxable but there are exceptions. Whoever is receiving the funds needs a tax advisor ASAP.
    Answer Applies to: Florida
    Replied: 6/4/2015
    Law Offices of Julie A. Ringquist | Julie A. Ringquist
    If it is a distribution of community property, no (she already owns it, even if it's not currently held in joint title, it's just being divided). If it is for Spousal Support, then it is taxable income to her and tax deductible to you.
    Answer Applies to: California
    Replied: 6/4/2015
    Diane l. Berger | Diane L. Berger
    That would be a no.
    Answer Applies to: Nebraska
    Replied: 8/27/2015
    Polsinelli Shughart PC | William B. Prugh
    Generally, transfer of property pursuant to a divorce or separation are not taxable income, with some strict requirements for qualifying for the exemption. If your divorce attorney cannot answer this for sure, contact a tax preparer, CPA or attorney for advice.
    Answer Applies to: Missouri
    Replied: 6/4/2015
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