Lump Sum

[bubman]

I took a "lump sum" of cash and vehicle, wife kept house, other two vehicles and Investment account. Do I have tax liabilities since the money was mine and we basically split value?

Cash settlement was in the divorce decree.

Thanks for the help!

[Lee Borden]

There's no tax liability attached to the transfer, because it's a transfer incident to divorce. Cash is cash, so there's no basis to it; just be grateful for it and try not to spend it too fast.

You emerged with the basis in the vehicle that you or your spouse had in it at the time of the transfer. If you simply drive it until it's junk (which my Daddy always taught me we all should do), there'll be no tax issue with it. The only tax issue with the vehicle arises if you sell it quickly and get more for it than your basis in it (unlikely for most of us). If you did that, you would owe tax on the difference between your basis and what you received in net proceeds.