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Level 1

Question

Divorce

Forum|Forum|4 years ago
April 25, 2022
1 reply
7 views

My husband and I are getting a divorce. He is planning on refinancing and buying me out of our home. My question is the money I receive from the buy out taxable income?

Level 8

Probably not. Under 26 U.S. Code § 1041, transfers of property between spouses or incident to divorce are generally not taxable.

Additionally, the Tax Cuts and Jobs Act of 2017 removed the deduction for alimony payments or the inclusion of those payments into income for divorce or separation agreements beginning 1 January 2019, so any property settlement considered to be alimony is not taxable to you or deductible by your soon-to-be ex-husband.

CLARIFICATION: Changes to deduction for certain alimony payments effective in 2019