deed transfer and purchase

[mcgyvette]

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?

[DaveF1006]

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.