Answers To Basic Questions About Individual Retirement Accounts At Divorce
WHAT YOU NEED TO KNOW ABOUT IRA’S AT DIVORCEWHAT YOU NEED TO KNOW ABOUT IRA’S AT DIVORCE Excerpted From "The Survival Manual For Women In Divorce" and "Survival Manual For Men In Divorce" Both Available By Credit Card Purchase on This Website for $12.95 each (Click on Media Library) Or Send $12.95 Check or Moneyorder for each payable to "Women’s Manual" or "Men’s Manual" to Flying Solo P. O. Box 11704 Columbia, South Carolina 29211 Are our IRAs considered to be marital property? Yes. They can be divided and transferred just like other pieces of property. How can my IRA be transferred to her? Do I have to pay penalties or taxes on the transfer? The transfer is permitted because it is a result of a divorce court order. There are no penalties or taxes as long as the asset is put into her IRA within 60 days. You said in before that she could take a portion of my pension plan, pay taxes but pay no penalty. Can she do the same with my IRA? No. An IRA is not divisible by a QDRO (Qualified Domestic Relations Order) and therefore is not subject to the same rules. If you are under the age of 59 1/2, she will have to pay the 10% penalty in addition to the taxes on the amount taken out if she doesn't put the money into her own IRA within 60 days or if she takes funds out of her own IRA. I have always done a spousal IRA for my wife. Can she still contribute to this? If she is receiving maintenance, this qualifies as compensation and she can contribute to her own IRA within the normal guidelines. I have always contributed to a spousal IRA and deducted it from my taxes. Can I deduct the contribution this year if we are divorced this year? No. If your divorce is final before the end of the tax year, you cannot deduct any contribution you made to your ex-wife's IRA on your tax return. © Carol Ann Wilson, Certified Financial Planner, and Edwin Schilling, III, Attorney at Law, Authors of "Survival Manuals"
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