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    #1

    Divorce situation

    Client was paid $40,000 for his equity in the house upon divorce. She keeps telling him that he better claim it on his taxes. I explained to him that the only way he would was if there was alimony or something along those lines. A payment for your own equity in your home shouldn't have to be included on the return.

    My questions, can anyone see a way that the ex could mess this up? I'm thinking she may try to deduct the payment as alimony.
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    #2
    If she does she will be the one explaining it to the IRS. Property settlement incident to a divorce don't generate income.
    In other words, a democratic government is the only one in which those who vote for a tax can escape the obligation to pay it.
    Alexis de Tocqueville

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      #3
      My question is...is she a trained tax preparer? If the answer is no I would totally disregard anything she says...but just to be on the safe side have you seen the divorce agreement?
      Believe nothing you have not personally researched and verified.

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