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#775384 - 04/11/19 11:50 PM Tax implications of a cash payment
ConTend Offline
recently joined

Registered: 02/26/19
Posts: 3
I am in the middle of divorce with my soon to be ex wife.
So far trying to pull off an amicable divorce. I am currently out of work, will be starting a new business after the divorce.
Have few rental properties and family home residence to split. She wants to keep it all and buy me out with a small cash payment upfront and then monthly payment for four years. I really don't care much for dealing with monthly payments but to keep it amicable I will go with that because I know she can't just buy me out 100% right away.
I am trying to reduce my tax liability of the divorce, so can I have the money deposited to my self directed IRA or there is even better way to do it?
Than you in advance.

#775387 - 04/13/19 08:28 PM Re: Tax implications of a cash payment [Re: ConTend]
MinnesotaMom Offline

old hand

Registered: 01/05/11
Posts: 969
I wouldn't do a payment plan without strict guidelines if a payment is missed. For example, any payment more than 15 days overdue results in her losing all equity in the properties and they go to you. Otherwise, you have no teeth to collect and it will cost a fortune trying to. It's most wise to cut all financial ties by whatever means necessary. If she is unable to buy you out now, a court would order one or more properties sold to satisfy the debt. This also gets complicated and must be carefully worded so at to actually force the sale, in how much time, with what's a reasonable offer, etc.

The tax directed stuff is very complicated. You would need an expert for direction. The laws vary greatly from state to state. Your case is not simple enough to not have an attorney, unless the eventual outcome of giving away the properties is acceptable to you.


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