Equity Payment in Divorce

[quicksam]

I have a client who divorced and her husband had to pay her $7500 of the $15000 equity in their home.

Would any of that be taxable? If so where would you report it?

The value of the home should not have changed much during the 2 years they owned it.

Thanks in advance.

[taxmandan]

I have a client who divorced and her husband had to pay her $7500 of the $15000 equity in their home.

Would any of that be taxable? If so where would you report it?

The value of the home should not have changed much during the 2 years they owned it.

Thanks in advance.

Assuming he isn't pulling cash out of a qualified pension plan early, a property settlement incident to divorce won't be a taxable event. Make sure you see the divorce decree that spells out the assignment of marital assets.