Bob <bobhasanaccount[at]yahoo.com> wrote:

- quote -

The key is to make the split (whether as part of the divorce
agreement, or on the side) a QDRO (Qualified Domestic Relations
Order): to oversimplify, that means it's made according to a court
order, in a form the IRA custodian recognizes as a QDRO. Your lawyer
should know how to arrange for this; if he doesn't, you need a better
lawyer.

--
Chris Green

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"Bob"
<bobhasanaccount[at]yahoo.com> wrote:

- quote -

Not sure why this is in response to my message. I generally
don't reference IRS Pubs nor did I make any comments
regarding how "dumb" the question was.

--
David M. Woods, EA, ChFC, CLU
Woods Financial Services
Norwood, MA 02062
www.woods-financial.com

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David Woods, EA, ChFC, CLU" <dwoods[at]woods-financial.com> wrote:

- quote -

OK... if I'm getting this right... I have to read pub 590
first before asking more dumb questions. I'll come back with
any followup questions later.

Thanks,

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David Woods, EA, ChFC, CLU" <dwoods[at]woods-financial.com> wrote:

- quote -

OK... if I'm getting this right... I have to read pub 590
first before asking more dumb questions. I'll come back with
any followup questions later.

Thanks,

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- quote -

Tax, no. Penalty, possibly, if the transaction met one of
the standard exceptions to the penalty described in IRS
Publication 590.

Phil Marti
Topeka, KS

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"Bob"
<bobhasanaccount[at]yahoo.com> wrote:

- quote -

It ISN'T alimony. If the split isn't specified to in the divorce agreement,
its a taxable event. There is no way around that. More importantly, since
you describe none of the exceptions to penalty, it would be subject to that
as well.

--
David M. Woods, EA, ChFC, CLU
Woods Financial Services
Norwood, MA 02062
www.woods-financial.com

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Bob <bobhasanaccount[at]yahoo.com> writes:

- quote -

Unless rollled over, the distributions will be taxable, no
matter what!! A 10% penalty may also be applied with the
exception for distributions from a qualified retirement plan
(other than an IRA) to an alternate payee under a qualified
domestic relations order,

"Jack" - John H. Fisher - TaxService[at]aol.com
Philadelphia, Pa - Atlantic City, NJ - West Wildwood, NJ
My Newsgroups & Boards at: http://members.aol.com/TaxService/index.html

Where Ignorance is bliss, 'tis folly to be wise!=

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What mechanisms would be available to (legally, of course
:-) engineer a withdrawal of money from a SEP-IRA to be used
as part of a divorce settlement without a taxable event
and/or penalty ? I know (based on a thread here) that the
IRA can be split between spouses without a taxable event.
However, in this case, the goal would be to free up some of
the IRA funds to, for example, retire some joint debt and/or
the mortgage at divorce time.

Is there any way that it could be structured from a tax
viewpoint to pull that off without penalty and/or tax on the
withdrawal? For example, could the payment be legally
labeled as alimony and used by the spouse who receives it to
pay the debt? I'm *not* looking for some kind of
questionable deal - but something entirely legit that would
stand up to IRS scrutiny. I really would not want a tax
issue to arise later and be left holding the bag. It would
be better to engineer it into the bag right up front if
that's how it has to happen.

Thanks,

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