No, there is no tax deduction for a division of property or retirement assets at the time of the divorce. You can deduct the HELOC interest as a mortgage interest deduction subject to the usual rules for HELOC loans. If you had elected to distribute part of your retirement pay to her instead, that would not have been a tax to duction either. You simply would have to pay less tax on less income. Now, you will be getting your full income.
