Rick and Rita are divorcing and the litigation has turned contentious. Rick is withholding documents pursuant to a valid discovery request that demonstrates Rita is entitled to a portion of the property Rick claims is separate property. At a hearing on a motion to compel discovery responses, the judge sanctions Rick $3,000, representing attorney's fees Rita has spent to attempt to obtain the discovery responses. In the final settlement agreement reached between the parties, Rick agrees to pay the $3,000. Will Rita be taxed on the $3,000?
