How to handle transactions in a divorce settlement

Tax
#1

I recently got divorced and my ex and I have a settlement that includes cryptocurrency. What is the best way to categorize transactions sent to her wallet to satisfy a settlement obligation?

By default, these transactions show up as “sends” - but a transaction in a divorce is not a taxable event.
If I change this to transfer into “other transactions”, the coins remain in my portfolio, which isn’t ideal either.
I could label it as “lost / stolen” which certainly feels more accurate, but I’m not sure how CT records these events in reported tax documents.

Any advice would be appreciated.

3 Likes
#2

@plusbryan did you ever figure this out? I emailed CT in January with the same question but never got a reply.

CT Support - what we need is a way to classify a send that will:

  1. Remove coins from our portfolio.
  2. Not count it as a taxable event.

Is there a category that we could ‘borrow’ to get the portfolio numbers to work out?

Ex.

  1. I buy 2 BTC in June 2020 for $10k each.
  2. I Hodl then transfer one Bitcoin to my ex after divorce in April 2021.
  3. I have one BTC left with a cost basis of 10K.
    4 The transfer is not a taxable event.

We could ‘ignore’ the transaction to tell your system not to charge tax, but then of course the portfolio would still show 2 btc in my balance. I could mark it ‘lost’ but that is still taxable right?

1 Like
#3

Wow, very practical case with detailed info from users but no feedback from support in seven months? I was thinking to upgrade my account to paid, but the situation with the support is causing me concerns.