Is ex-spouse's repayment of funds I lost due to his failure to relieve me from liability stemming from his business taxable?

[Anonymous]

Long story, hopefully not so long: Ex-husband and I divorced in July 2017. In the decree, he was to be solely liable for everything related to his business, for which I co-signed a loan. Two years later, his business closed and he went bankrupt. The SBA came after me for repayment of the loan. I, in turn had to declare bankruptcy, which was closed in June 2020. (I listed a claim against my ex as a potential asset the bankruptcy trustee could pursue, but she declined.) Now to present day: My ex-husband wishes to pay me a lump sum for my losses associated with this failure hold me harmless from matters related to his business. How do I handle that in my tax return? Thanks in advance for any input.

[Vanessa A]

If he is just paying you for money you are out, then this is not a taxable or reportable event.  He is simply returning to you what should have been yours that you "lent" him in a way.