Generally, money that is transferred between (ex)spouses as part of a divorce settlement—such as to equalize assets—is not taxable to the recipient and not deductible by the payer. This is different than alimony, also called spousal maintenance, which is taxable (and deductible) unless the settlement specifies that it is not. In some cases, a settlement might include an asset transfer and a lump sum of alimony instead of periodic payments—in that case the alimony will generally be taxable.
However, if the asset transfer includes a tax-advantaged retirement fund like a pension, annuity, IRA or 401(k), then the money will be taxed by the spouse when they withdraw it. Such plans are always taxable on withdrawal because the money was not taxed when it was contributed. If you receive IRA-type assets in a divorce, you may have several options on what to do with it, with different tax consequences.
