
Quoting
llworking
Of course there are no taxes on a distribution of marital property...other than taxes paid on anything that comes out of a retirement account.
However....you still are not getting it. He gets to deduct money he pays as alimony. It reduces his taxes significantly if he does. It does not matter where he sources the money, he still gets to deduct it from his taxes. For someone who is only going to be paying alimony for two years, and someone in his marginal tax bracket, it would be ludicrous to give up the tax deduction in favor of an adjustment to the property settlement. I can see it perhaps being worthwhile in a situation where alimony could be for a much longer term, but in a short term alimony case it again, would be ludicrous.