Discussion:QDRO
From TaxAlmanac, A Free Online Resource
Note: You are using this website at your own risk, subject to our Disclaimer and Website Use and Contribution Terms.
From TaxAlmanac
Discussion Forum Index --> Tax Questions --> QDRO
| 1 February 2007 | |
| I have a client who has received half of her ex-husbands 401(k). Does she have to pay the early distribution penalty. The 1099R is coded 1. Can I just exclude it on the 5329? | |
| 1 February 2007 | |
| Yes, she has to pay the 10% penalty if she was not 59 1/2 on date of cash distribution. | |
| 1 February 2007 | |
| I think there is a provision for "incident to a divorce" somewhere | |
| 1 February 2007 | |
| QDRO... Income is taxable to her, no 10% penalty no matter what her age is. | |
| February 1, 2007 | |
| But gotta have the QDRO in place or she's hosed and the attorney dropped the ball. TJG, that stands for Qualified Domestic Relations Order... | |
| 1 February 2007 | |
| I believe it's the ex-husband who's hosed if there is no QDRO | |
| February 1, 2007 | |
| Good point. So why is SHE getting a 1099R then? Normally, he'd get the 1099R but not the money, aka 'hosed' without the QDRO. So are to presume that there was one, and that she then cleared out the money, creating the 1099R to her? Seems the only plausible option. | |
| February 1, 2007 | |
| So, the first answer was correct, and disregard all the rest. | |
Death&Taxes (talk|edits) said: | 1 February 2007 |
| Huh, then what is line 1F on the 5329 for, if she took the money thru a QDRO incident to divorce. This is not an IRA. Maybe I don't understand the phrase 'alternate' payee. | |
| 1 February 2007 | |
| CATAXES is right. Husband's contributions to 401K were pre-tax. If ex-wife didn't roll over to an IRA of her own, she is liable for the tax. I believe that the only way the plan administrators would have release 1/2 of husband's 401K to wife is thru QDRO. | |
Death&Taxes (talk|edits) said: | 1 February 2007 |
| That is what I am saying...JR sent us to the 10% penalty...fie on him :) | |
| 1 February 2007 | |
| TJ See Sec. 408(d)(6).
It explains what you are looking for | |
To join in on this discussion, you must first
log in.
