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Level 6

Question

Divorce Assets

Forum|Forum|6 years ago
March 14, 2020
2 replies
23 views

My sister got divorced in 2019. Does she have to report the assets or cash she received from her divorce?No retirement accounts were involved. Thank you.

State of residence: Texas.

Not A Product Question

Level 15

Generally speaking, cash and property divided in a divorce is not taxable income or tax deductible to either party. However, if she received certain tax privileged assets, such as a distribution from the spouse’s 401K through a qualified domestic relations order (QDR0), she has a limited number of options of what to do with that money, some of which involve paying tax. If she received a (QDR0) she would also have received a 1099 form from the trustee.

fasteddie577Author

Level 6

Thank you very much.

Level 15

No, property settlements from a divorce are NOT taxable income.

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