Thanks again for the response. This transaction will NOT be considered alimony. In that case, what are the taxable consequences to the recipient ex-spouse? Is it considered
1. a non-taxable gift?
2. a non-taxable exchange with equal value to each party (i.e. prepayment of 10 yrs of court-ordered alimony in exchange for forgiveness of all remaining obligations under court-ordered divorce settlement?
3. fully taxable income in the amount of $300K to recipient ex-spouse.
Thoughts?
