Received all the 401k, in a Divorce settlement. NEED LOTS OF ADVICE, ON HOW TO HANDLE THE TAXES!

Generally, anything you take out of the 401(k) plan is taxable income to you. In addition, there is a 10% excise tax on anything you take out before retirement. Generally speaking using pension funds in this way is a mistake. Depending on your age, and ability to obtain financing, you may be able to take sums out of the 401(k) plan over your estimated life span, pay the taxes, and use the balance to pay the mortgage. This would enable you to avoid the 10% excise tax. Please speak with a tax person near you before you proceed. This could be a huge mistake.

This issue has some complexities because it depends upon how the funds were taken by you. Were they rolled over into a retirement account for you? If so, then they are still tax deferred at this time. If you are over 55, you may take such funds out of the retirement account with no penalty, but you still pay income tax on the amount taken out. I suggest that you have your accountant and your tax attorney review this carefully before making a decision about how to fund the purchase of the home.