tax law

if a divorce attorney has a lien on your settlement, how does that affect your taxes (if it is from an ira)?

does it reduce the penalties for early distribution of ira (federal and california state)?

what if his fees are taken from stocks that are not in an ira?

how does it affect capital gains taxes?

Distributions from an ordinary IRA are taxable income; therefore, the amount withdrawn will be added to taxable income. There are exceptions to the rule that early distributions are subject to a 10% penalty, but your case does not fit any of the exceptions; therefore, in addition to the taxable income, there will be a 10% penalty for the early withdrawal.

If his fees are taken from stocks that are not in an IRA, then that will cause a sale of the stock. You will be taxed on that sale the same as you would on a sale of the stock for any other purpose.