april101504
Apr 25, 2011, 12:48 PM
My spouse and I are going through a divorce. We have 4 mortgages - 3 are rental properties and 1 is our own home. He will be keeping the house and the 3 rental properties and we agreed on a lump sum he will buy me out with. He does not want to refinance to pay me out and is choosing to pay me out with his IRA and 401K instead. We agreed that he will "cash out" the money instead of rolling it into a retirement fund for me because I am planning on buying my own house and need the cash. He is also going to take the penalties incurred by doing this. If he is taking the penalties for the cash out, will I have to claim this as income and also get penalized?