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deed transfer and purchase

mcgyvette — Wed, 26 Jan 2022 20:28:15 GMT

My husband and I owned a piece of land. We divorced in 2021. I purchased his share of the property for an agreed upon amount. We did it as a deed transfer. Does he have to pay taxes on the income and/or count this as capital gains? Moving forward how do I calculate the cost basis for my taxes down the road?

Re: deed transfer and purchase

DaveF1006 — Wed, 26 Jan 2022 20:36:15 GMT

Yes, he would report his share that you purchased as investment income on his tax return. This would be computed as a capital gains tax. Your basis will be calculated by adding the basis of your share you already owned plus the purchase price of your husband's share that you purchased.