Thank you for this additional information. and for raising the issues. The transfer is specifically of RSUs that just vested this year (over two years after divorce). The courts would have to characterize this income as community property in a trial because of the complexity of when these shares were granted and vested. So, the characterization is actually not 100% clear. In any case, I negotiated transfer of these shares to him as part of an entire settlement agreement.
The vested shares normally require me to pay ordinary income tax and self-employment tax at vest. Our divorce decree does say he is fully responsible for any and all taxes on these vested shares that were transferred to him.
I checked in turbotax and filing as negative Other Income vs a 1099 MISC income payment for my Schedule C is about a $500 tax hit to me.
