I recieved $25000.00 at the time of signing of seperation papers, it was a cashiers check. do i have to claim that as income?

Asked over 1 year ago - Wytheville, VA

i dont believe the $ was actually classified as anything in particular. just $25000.00 to take my personal belongings & half the stuff in house & leave. he kept the house and land

Attorney answers (3)

  1. Peyton Hunley Robinson

    Contributor Level 12

    4

    Lawyers agree

    Answered . Under Internal Revenue Code sec. 71, gross income includes "amounts received as alimony or separate maintenance payments." "Alimony or separate maintenance payments" has several defined characteristics, one of which is "such payment is received by (or on behalf of) a spouse under a divorce or separation instrument." IF classified as such, it would be income to you and he would get a deduction under sec. 215.
    On the other hand, if there is no written document, transfers of property (including cash) between spouses or incident to divorce are not a taxable event under sec. 1041. If I understand your post correctly, it sounds like this latter section applies to you. So you should not have to claim the $25K as income.
    You can see the code sections at -- http://www.fourmilab.ch/ustax/www/contents.html

    This answer or response should not be considered legal advice, and does not create an attorney-client relationship.... more
  2. Evan A Nielsen

    Contributor Level 18

    3

    Lawyers agree

    Answered . Sounds like this was part of the asset settlement - if so it would not be taxable becasue it was already something that you "owned" or had "earned" during the marriage and was simply being divided between you as part of the divorce settlement. Any tax liabiliy would be associated with the earning of the asset (wages, interest, etc.) not in your receiving your portion.

    Good luck.

    Evan A. Nielsen is licensed to practice law in California. The information provided here is for educational... more
  3. Eduardo Guillermo Sanchez

    Contributor Level 11

    1

    Lawyer agrees

    Answered . Under Internal Revenue Code Section 1041, transfers between spouses are not taxable, even in separation or divorce proceedings.

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