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
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