client gets divorced...

[ajuroff]

He moves out of house in July. Divorce is final in Sept. Wife had to pay him $31,000 (1/2 value of home to buy him out) This is not considered alimony. Would I report this as a sale of the home with him getting half the cost? He would be able to exclude any gain.

[Yardley CPA]

He moves out of house in July. Divorce is final in Sept. Wife had to pay him $31,000 (1/2 value of home to buy him out) This is not considered alimony. Would I report this as a sale of the home with him getting half the cost? He would be able to exclude any gain.

Was there any type of 1099 issued to him?

[ajuroff]

none.

[jasdlm]

It's property settlement, not 'house sale'. No reporting required.

[BulldogTom]

agree with jasdlm. It is a property settlement and not reported.

Tom

Lodi, CA

[ILLMAS]

What a lucky guy :D

[Daune/CA]

Could there not be a potential capital gain depending upon equity in house when purchased or married and equity at time of divorce? Yes it is a property settlement, but there may have been a gain in equity over the marriage time that was more than amt of payments to principal. Of course it would be equity divided by 2, which I gather the full equity at time of divorce is $62,000. Sale only for husband, purchase of equity by wife.

[Lion EA]

Sale incident to a divorce has no current tax consequence. Basis stays the same in the hands of the now sole owner as it was the last day both of them owned the home. Only when now sole owner sells, will he/she have potential capital gain. New non-owner has cash instead of his/her share of home, just a property settlement. This is the simplified version; your mileage may vary.