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  1. #1
    Join Date
    Sep 2006
    Location
    chicago,Il
    Posts
    9

    Default Re: Double Taxing of IRA Distribution for Divorce Agreement

    Just this: I took money from my IRA as normal distribution, received form 1099R with taxable amount, and payed income tax on it.
    She endorsed my IRA check, and deposited in her bank account. I think IRS could have questions, seeing a large sum appered on her account. they may think it's a gift or undecleared income and will ask for explanation. So, I'm worry if ex-wife will be taxed again+ penalties etc

  2. #2
    Join Date
    Sep 2010
    Posts
    19,901

    Default Re: Double Taxing of IRA Distribution for Divorce Agreement

    You didn't answer the question.
    We can't answer the questions without it, really.
    The IRS generally doesn't going to look through people's bank accounts.
    The recipients of such things (which I have no idea whether it was just division of marital property under a qualified order or an ad hoc distribution which be a gift) don't generally owe any taxes on it. You however may be obligated to file gift tax and this may apply towards your lifetime exclusion.

  3. #3
    Join Date
    Sep 2006
    Location
    chicago,Il
    Posts
    9

    Default Re: Double Taxing of IRA Distribution for Divorce Agreement

    I'm trying to be clearer. I and wife wrote all that marital property division agreement. Our lawer just submitted that papers to the case. court approved officially our divorce. We don't have separate QDRO. I literraly followed the agreement. Do you belive IRS may concider it as gift and tax my ex-wife or me additionaly?

  4. #4
    Join Date
    Sep 2010
    Posts
    19,901

    Default Re: Double Taxing of IRA Distribution for Divorce Agreement

    If it was pursuant to a divorce settlement (and I'd definitely keep track of some documentation that it was), then it's not subject to gift tax.

    The recipient doesn't pay any (federal at least) gift tax.
    The donor may owe some, but you have a $1M lifetime exclusion that you've probably not likely hit yet.

  5. #5
    Join Date
    Sep 2006
    Location
    chicago,Il
    Posts
    9

    Default Re: Double Taxing of IRA Distribution for Divorce Agreement

    Thanks a lot.

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