I did not get the house...he did. I am getting a settlement out of his TSP account. I want to use this money to put down on a house. Will I be taxed on this money if I do that, and how does it work? I have read some places that IRA or other type account settlements can have a tax amount of up to 35%. Lets say for argument's sake my settlement is $50,000. Does that mean I will have to pay a lump sum tax of $17,500 when I get that money? Is that still the case if I am going to use that $50,000 as a down payment?