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house sold and ex gets part - Alimony or part of sale, 1098-S, 1099?


WITAXLADY
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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

 

 

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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.

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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.

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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?

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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.

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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

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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.

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