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My wife and I are getting divorced. As a part of the divorce,

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I am receiving money for...
My wife and I are getting divorced. As a part of the divorce, I am receiving money for my interest in the family home. As a part of the that, I have to sign a transfer of the deed. In our agreement, the transfer was to be between my ex and myself. Recently, she has presented me with a Quit Claim deed that has the transfer occuring between myself and a living trust in her name. If I sign it, what tax implications are there for me? I am receiving 20% of the value of the house, if that matters. I know that transfers between spouses pursuant to divorce are non-taxable but what about between me and the trust?
Thanks,
David
Submitted: 8 years ago.Category: Tax
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Answered in 22 minutes by:
9/1/2009
Tax Professional: Bill, Enrolled Agent replied 8 years ago
Bill
Bill, Enrolled Agent
Category: Tax
Satisfied Customers: 3,153
Experience: EA, CEBS - 35 years experience providing financial advice
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There should be no tax implications for you even though it is being transferred to a revocable (assuming it is revocable) living trust instead of directly to her because the trust is for her benefit and no gain or loss is recognized on transfers between spouses. Assuming the trust is revocable, then all income and transactions in the trust are reported under your wife's social security number and taxable on her personal income tax return.

 

See pages 17 - 19 "Transfer between spouses" - http://www.irs.gov/pub/irs-pdf/p504.pdf

 

Bill
Bill, Enrolled Agent
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