[jimbo999]

I live in Washington State and was divorced and the divorce decree was signed by the judge on 10/8/07 It included a Marital Settlement Agreement about how property was to be divided. Then about 9 months later we decided we wanted to do a buyout so my ex-wife could buyout my interest in the house. So we did an Amendment to the MaritalAgreement which included the option for a buyout and that was signed by the judge on 8/27/08. She will be getting a loan soon and approximately January 31, 2009 we will do the closing and the buyout will be complete.

As I understand it from IRS Pub 504 if the buyout is part of the decree and done within 6 years of the marriage ending then you do not have to pay taxes on that money. Is that correct? Also when I report that on my income tax form (1040) what line do I enter that on and is there a schedule that I have to use with it. What papers do I need to file with the taxes (i.e. divoce papers, her loan papers to pay me)
Thank you

[AtlantaTaxExpert]

That is correct; no taxes will be due if the profit on the sale is less than $500K.

That being the case, the IRS does NOT want you to report ANYWHERE on your tax return.