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#769609 - 03/21/15 09:05 PM Real Estate Lien Income- Taxable?
Karcur Offline

recently joined

Registered: 03/21/15
Posts: 1
My ex wanted to give me $500,000 paid over 5 years in the divorce (no questions or comments about this amount please). This monthly payment is in addition to the child support. In the decree, the $500,000 is listed as a "Real Estate Lien Note." (I'm not sure why it was handled this way instead of classifying it as alimony, but that's a different question. If you could answer that as well, I would be grateful. I should have asked at the time but was too overwhelmed. We both used the same lawyer and I see now that may have been a mistake.) Our house has since sold for way under what we paid for it, so he had to bring money to the closing. I guess the "real estate" in question no longer exists, but I am still getting some extra money, even if it's a small fraction of what he promised. If I count this money as taxable income, I have to pay $700 in taxes instead of getting a $1,000 refund. I know that child support is not considered taxable income, but what about "Real Estate Lien Note" income? Thank you in advance for your help.

#769610 - 03/24/15 09:32 AM Re: Real Estate Lien Income- Taxable? [Re: Karcur]
MinnesotaMom Offline

old hand

Registered: 01/05/11
Posts: 880
What did your attorney say when you asked them?

#769611 - 03/24/15 01:48 PM Re: Real Estate Lien Income- Taxable? [Re: MinnesotaMom]
Redlegg Offline
Carpal \'Tunnel

Registered: 10/06/06
Posts: 27903
Seems like a real estate lien may not be taxable to the person who the lien is against. (like a refinance) If the real estate that the lien was taken out on, was sold, it would also seem that the lien had to be satisfied. If he took out any kind of loan, and a lien was put on real estate, the interest on the loan can be deducted on the taxes. It may fall under gifting limits if it is not technically a support payment. That would probably best be answered by a CPA. Once you get the answer on that, the next question would be is he meeting the amounts laid out in the decree, and is he in contempt if he does not. To me, his reasons are his reasons, and the key for you is to find out if it is taxable, or if it is not. Once you find out, it is totally up to you to declare it, or not, but knowing what it is, would be the first step.


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