Question

Divorce Assets

Forum|Forum|6 years ago
March 14, 2020
2 replies
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My sister got divorced in 2019. Does she have to report the assets or cash she received from her divorce?No retirement accounts were involved. Thank you.

State of residence: Texas.

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Opus 17

Employee

Generally speaking, cash and property divided in a divorce is not taxable income or tax deductible to either party. However, if she received certain tax privileged assets, such as a distribution from the spouse’s 401K through a qualified domestic relations order (QDR0), she has a limited number of options of what to do with that money, some of which involve paying tax. If she received a (QDR0) she would also have received a 1099 form from the trustee.