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alyons72
New Member

Divorced in 2016. Ex and I agreed to specific amount he would pay me in equity. I signed quit claim prior to sale of home, and escrow paid me the amount in decree. ??

I am not sure if I list the amount as capital gain.  I was not a part of the sale itself (I signed quit claim prior to sale); amount I was given was less than $150,000; I lived in our home for 15 years prior to divorce.
1 Reply
Opus 17
Level 15

Divorced in 2016. Ex and I agreed to specific amount he would pay me in equity. I signed quit claim prior to sale of home, and escrow paid me the amount in decree. ??

There are two possibilities.  

1. You both sold the home, and you received a share of the proceeds.  You would calculate the capital gains and your exclusion based on the share of proceeds.  For example, if the total sale price was $400,000, then you received 37.5% of the property, so you would calculate your gain based on 37.5% of the cost basis.  Since the gain is less than $250,000, it qualifies for the exclusion, and is not taxable, and does not need to be reported unless you received a form 1099-S at closing.

2. You transferred the home to your spouse as part of the divorce settlement.  Your ex sold the home and, as sole owner, is solely responsible for the gains tax.  Because assets transferred as part of a divorce settlement are not taxable, this money is not taxable and doesn't need to be reported.

So ether way, you don't owe tax, and probably don't even need to report it.
*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*

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