IRA Distribution/Divorced

[zeros]

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.

[veritas]

See page 13-3

of TTB for exceptions.

[Roland Slugg]

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.