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Will I be penalized if i use the money i received from my divorce awarded to me from my ex-husband IRA account. ?

Chesterfield, MO |
Filed under: Divorce

I was awarded 61K from my ex-husband IRA former his former employer pension plan. Will i be penalized and have to pay taxes or will my husband have to pay the taxes on the funds before they are transferred to me. I want to use the money to buy me a home. I will not be retirement age for another 6 years.

Attorney Answers 3

Posted

Depends if your husband transfer the money out of his account or whether the account is transferred pursuant to a court order to your IRA and then you take it out. Speak with a CPA about the tax consequences. If you take money out if the IRA too early there is a 10 percent penalty and it is taxable at your marginal tax rate.

If this answer is helpful, then please mark the helpful button. If this is the best answer, then please indicate it. Thanks. For further information you should see an attorney and discuss the matter completely. If you are in the New York City area, then you can reach me during normal business hours at 718 329 9500 or www.mynewyorkcitylawyer.com.

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Posted

It is the judgement of the court that he transfer that amount to me out of his account.

Posted

Depends on what kind of IRA it came out of.

Attorney Williams practices FAMILY LAW throughout the State of California. The response provided in this forum is not intended to create an attorney-client relationship. The information offered in this response is for general informational purposes only and should not be relied upon without further consultation with a legal professional after all relevant facts are disclosed and considered. DANIEL S. WILLIAMS, ESQ. LAW OFFICES OF DANIEL S. WILLIAMS 500 LIGHTHOUSE AVENUE, STE. A MONTEREY, CA 93940 (831) 233-3558 -- OFFICE (831) 233-3560 -- FAX

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Posted

You will have to pay ordinary income taxes on your withdrawal. If you are not yet 59 1/2 years of age, you will also have a penalty. You need to consult with your financial advisor to find out how much your taxes will be.

As a general rule, the provider of the IRA will withhold 20% of the distribution. You need to check with your financial advisor to see if you are old enough to avoid the withholding.

Answers given here are for general information only and do not create Ana attorney client relationship. The choice of an attorney is an important decision and should not be based on advertisement. I only am licensed in the state of Missouri. If you are seeking information in a different jurisdiction, you should seek an attorney in your jurisdiction.

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Asker

Posted

Since my ex and I had the same financial advisor will he be able to give us both advise on the IRA?

Catherine Earnshaw-Hobbs

Catherine Earnshaw-Hobbs

Posted

It depends on what credentials he has. Some can and some cannot. If you want to be sure the advice you receive is just for you, though, you need to seek out a separate advisor.

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