No, in general, a divorce settlement paid in cash is not taxable income to be reported on your tax return, as long as your name was not on the title to the property on the date of the sale.
Per IRS
Pub 504 Property
Settlements:
Generally, there is no recognized gain or
loss on the transfer of property between spouses, or between former spouses if
the transfer is because of a divorce.
A transfer incident to your divorce occurs within one year after the date your marriage ends, or is related to the end of your marriage.
However, if you retained joint title on the date of the sale, you may need to report any taxable gain on your tax return. If this was your main home, you may be able to exclude up to $250,000 (up to
$500,000 if you and your spouse file a joint return) of gain on the sale. For more info, see: Is the Sale of My Main Home
Taxable?
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