Q: I live in Maryland. I am going to receive a $10,000 Monetary award in my divorce settlement in lieu of going through
A court battle at great expense. I am also receiving 100% of the proceeds from the sale of the marital home in lieu of taking his retirement or pension and I’m not asking for alimony. With the additional $10,000 award it works out in my best interest. My question is, will I have to pay any kind of taxes on the $10,000? I have already determined that I will not have to pay capitol gains on the proceeds of the house. THANK YOU! Paula
A: No. A monetary award is made to adjust the equities between the parties as to existing marital property and debts. It is not an award of new taxable income. It merely shifts already earned and taxed income (or property purchased with that taxed income) from one spouse to the other.
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