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I went through a divorce in February 2012 and my husband kept the house. His retirement account will be rolled into my 401k and he will need to compensate me a lump sum payment of $125,000. I'm wondering how this money should be treated for tax purposes? This is not for a community property state.


ANSWER


Expert Todd Alexander's Answer:

 In general, property settlements in related to divorces are not taxable.  This is true for either a community property or a equitable distribution state.  

Todd Alexander, CPA

California

20 yrs experience

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