My wife received about $6,000 from her father after he sold his home as was mandated in a divorce settlement from several years ago as a way for the kids to split what they parents had jointly invested. Do we need to claim this as a gift or income on our taxes?

AJC:

Since it is a gift, you do not have to claim the $6,000 as income.

Further, the $6,000 is well below the annual $11,000 gift exemption, so your wife's father does not have to report it as well.

Both of you are home free. Spend or invest the money as you wish.

Thank you for all your help on my questions.

That's what we are here for!