If I get divorced and transfer a portion of the payments to my ex-spouse, will I loose the exemption from the 10% penalty tax?
A. The transfer to a taxpayer’s spouse pursuant to a divorce decree of 50% of each of three separate IRAs owned by the taxpayer from which the taxpayer had already begun receiving “substantially equal periodic payments” did not result in a modification where the taxpayer’s spouse was two years younger and would commence receiving similar payments such that the total of periodic payments to the taxpayer and his spouse subsequent to the division would be substantially equal to the periodic payments received by the taxpayer prior to the division. PLR 9739044 In PLR 200027060, the IRS rules that a spouse after the divorce, that received a portion of the client’s IRA accounts that were being used to fund a SEPP, didn’t need to continue the payments since it was a transfer under Code section 408(d)(6). What about the client – did all the payments have to be continued out of what remained of his accounts? Later in PLR 200050046 (with similar facts) the IRS ruled in favor of the taxpayer. “The
Related Questions
- I was divorced in 2010, and have made monthly child support payments to my ex-spouse since the divorce was final. May I claim that child that is in his/her custody as my dependent for tax purposes?
- If I get divorced and transfer a portion of the payments to my ex-spouse, will I loose the exemption from the 10% penalty tax?
- Is there a tax penalty to transfer an IRA to an annuity?
