Income Tax % w QDRO Cash Out

My husband owes me $60k from his 401k. I want to buy him out of the house and would owe him $80k. He doesn’t agree to keeping his 401k intact because he wants cash. This makes it difficult for me to afford buying the house because even though I can add it to the mortgage loan, my payment and interest would be higher. What would be the tax amount I would pay if I ask to cash out the 60k in the QDRO? Thanks!

The tax amount and early withdrawal penalties are determined at the time of the cash out. If he is to pay you $60,000 even in order to equalize the distribution of the marital estate, then he will have to incur the taxes and penalties unless you are able to negotiate a transfer of the retirement assets tax-free and penalty-free to you, then he can cash out his remaining portion if he so chooses.

Anna Ayscue

Attorney with Rosen Law Firm Cary • Chapel Hill • Durham • Raleigh • Wake Forest

Rosen Online | Unlimited confidential access to a North Carolina attorney for $199/mo - click here

The response posted above is based upon the limited factual information made available and is not intended as a full and complete response to the question. The only reliable manner to obtain complete and adequate legal advice is to consult with an attorney, fully explain your situation, and allow the attorney sufficient opportunity to research the applicable law and facts required to render an accurate opinion. The basic information provided above is intended as a public service only, a full discussion with an attorney should be undertaken before taking any action. The information posted on this forum is available for public viewing and is not intended to create an attorney client relationship with any individual. These answers are provided for informational purposes only, a person should consult with their own individual legal counsel before taking any action that could affect their legal rights or obligations.