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

Asked over 1 year ago - Chesterfield, MO

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)

  1. Catherine Earnshaw-Hobbs

    Contributor Level 7

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    Answered . 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... more
  2. Jayson Lutzky

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    Contributor Level 20

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    Best Answer
    chosen by asker

    Answered . 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... more
  3. Daniel Seth Williams

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    Contributor Level 18

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    Answered . 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... more

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Divorce

Divorce is the process of formally ending a marriage. Divorces may be jointly agreed upon, resolved by negotiation, or decided in court.

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