401K division and taxes

[Cross Hair]

What is the name of your state (only U.S. law)? Ohio

If I turn over some of my 401K money to my soon to be ex wife will the money be taxed even if it's left in a retirement account? She doesn't have a 401K option but she could set it up in a IRA.

 

[LdiJ]

What is the name of your state (only U.S. law)? Ohio

If I turn over some of my 401K money to my soon to be ex wife will the money be taxed even if it's left in a retirement account? She doesn't have a 401K option but she could set it up in a IRA.

AS long as its done via a QDRO (Qualified Domestic Relations Order) signed off on by the judge in your divorce, AND its a trustee to trustee rollover out of your account and into hers, there is no tax liability.

 

[Bali Hai]

What is the name of your state (only U.S. law)? Ohio

If I turn over some of my 401K money to my soon to be ex wife will the money be taxed even if it's left in a retirement account? She doesn't have a 401K option but she could set it up in a IRA.

You will need a QDRO that specifies her portion and how she wants to handle it.

If you're thinking you can just withdraw the money, give it to her and she puts it into an IRA, that won't work.

 

[LdiJ]

You will need a QDRO that specifies her portion and how she wants to handle it.

If you're thinking you can just withdraw the money, give it to her and she puts it into an IRA, that won't work.

Bali is right. You can still avoid the 10% penalty doing it that way, but you cannot avoid the regular income tax. Do it properly through the QDRO and there will be no tax liability at all.

 

[mar16]

What is the date used to establish the value of the 401K?

The date the petition for divorce was filed?

The date of the final divorce decree?

A date if both parties agreem of their choosing?

Thanks