WITAXLADY Posted October 6, 2021 Report Posted October 6, 2021 Ex husband sells property and ex wife demands $34,000 of it as WI, community property and she owned 1/2 - (She lives in CA, now) How do I show that - 1099'ing her as he should not have to claim all that as part of it is hers.. More Alimony? not really? Thx D mostly only hard and messy left - Please do not abandon this forum so you can answer my questions, pplleeaassee Quote
Possi Posted October 6, 2021 Report Posted October 6, 2021 As long as it wasn't a rental property, I believe it is treated as part of a divorce settlement, not a taxable event. Wait for smarter people to post, though. Quote
Lee B Posted October 6, 2021 Report Posted October 6, 2021 D I continue to be astounded by the variety of clients that you have and the unusual issues that arise I am so thankful for the clients I have. 2 Quote
Lion EA Posted October 6, 2021 Report Posted October 6, 2021 My messy, hard, voluminous, international, dead, and anxious clients are left. And, our own with two SE spouses, IL, CT, IRS, etc. Thank you all for sharing your knowledge. I second Donna: please stop in each day through the 15th. 2 Quote
Catherine Posted October 6, 2021 Report Posted October 6, 2021 The question is really twofold: legal, and tax. Was it part of a QDRO in the divorce agreement? Is there anything in that agreement that states "husband will sell property X and give half of proceeds to wife" and then is there anything like "after provision is made for payment of taxes"? If he is to pay all the tax, then she should get her portion after the tax amount is paid, and it would be part of the property settlement and not taxable income to her (since he took it all, and paid tax on it all). If there is no provision for him to pay the tax, then she gets her portion on a 1099 as nominee, and she reports half the sale and gets half the basis (as of date of divorce; should have been listed there with a value) and pays tax for herself on the then-taxable gain (if any) but not on the part that is basis (i.e., her property) under the divorce agreement. Hope that it at least as clear as mud. 2 Quote
WITAXLADY Posted October 7, 2021 Author Report Posted October 7, 2021 well it is a mouthful.. I do no think there is any provision - I will ask him for the paperwork He used her lawyer, she took him to the cleaners He was trying and still trying to be nice what she asks she gets! I doubt this was in anything -he is placating her. Can I just treat it as part of divorce and ignore like Possi? Quote
DANRVAN Posted October 7, 2021 Report Posted October 7, 2021 8 hours ago, WITAXLADY said: Can I just treat it as part of divorce and ignore like Possi? No! You need documentation to prove that a portion of the gain was not his. If you allocate 1/2 gain to wife that was not hers it can come back to haunt you. It sounds like the property was titled solely to him after the divorce was settled. If so, I don't see how she could have any legal ownership or a share of the gain at that point. 19 hours ago, WITAXLADY said: ex wife demands $34,000 That does not sound like part of divorce settlement since it happened after the fact. He might find relief under 1-1041-1T (b) as a transfer of property incident to divorce, but I believe the transfer would have to go back to her share of the property instead of the proceeds of the sale. Also she would have to agree that she was a party to the property sale and 1/2 the gain was hers. He would need to get a lawyer to straighten that out. 8 hours ago, WITAXLADY said: He used her lawyer, Unfortunately, he decided to save on legal fees and look where it got him. Without legal documentation, he might have gifted away $34,000. 1 Quote
DANRVAN Posted October 7, 2021 Report Posted October 7, 2021 18 hours ago, Catherine said: The question is really twofold: legal, and tax. A legal issue for sure! 1 Quote
Lion EA Posted October 7, 2021 Report Posted October 7, 2021 Amen. What does the divorce decree say? 1 Quote
WITAXLADY Posted October 9, 2021 Author Report Posted October 9, 2021 I asked for papers - divorce, settlement and title.. then we will see.. D Quote
Patrick Michael Posted October 9, 2021 Report Posted October 9, 2021 I'm assuming when you say "Property" you are referring to a principal home. If this is correct, my question is was the $34K half the gain on the sale or just half of the proceeds? If a gain, can the husband take a section 121 exclusion and pay no tax? Quote
WITAXLADY Posted October 12, 2021 Author Report Posted October 12, 2021 not home - a property they had and he used for business - so probably depreciation on it! He has not sent divorce papers yet.. I will have to remind him again His 2019 personals are not filed yet as I cannot get answers Nice guy but Dr from Columbia - makes great coffee but wants lots of money back to pay her bunco $$$'s Quote
Catherine Posted October 12, 2021 Report Posted October 12, 2021 Well, this one can go nowhere until you get the docs. Including he should not pay her one red cent until the details are examined and ownership - and tax liability - shares are determined. 1 Quote
WITAXLADY Posted October 14, 2021 Author Report Posted October 14, 2021 Oct 14th and I am still waiting! for documents 1 Quote
DANRVAN Posted October 14, 2021 Report Posted October 14, 2021 12 hours ago, WITAXLADY said: Oct 14th and I am still waiting! for documents Without documentation that half of gain went to ex, then you have no choice but to report it. Then amend "if" he can prove it later on. You do not want a late filing penalty hanging over your head. Quote
WITAXLADY Posted October 14, 2021 Author Report Posted October 14, 2021 if he is getting a refund - rarely do they get a late penalty - in my experience - I do not think they care if you ever so the IRS can keep the $$$ only WI charges $50 1 Quote
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