Wife received about $45,000 from husband's IRA as a result of a divorce. She cashed it in. She has to pay tax on it but is this one of the exceptions for the 10% penalty? They are under 59-1/2.
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See page 13-3
of TTB for exceptions. -
No
Dear zeros
Since you may not have TTB, here is the direct answer: No.
The transfer from H to W was not a taxable event, but the distribution to the under-59½ wife is taxable AND subject to the 10% penalty. It's possible, of course, that some of the distribution may escape the 10% penalty of it falls under one or more of the legitimate exceptions to the general rule.Roland Slugg
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