Hi, there. My husband and I divorcing and put our house on sale. Lately, he offered to keep the house and give me my part of the house proseed (just if we did sell) through 401 K. Basically, he would give me money from his 401K.
1. Would do you think it's best for me to sell the house and split the proceeds or just take the same amount from his 401K? Can someone advise on that. I understand that there is a tax concequence...
2. Also, should I decide to take money from his 401K, can I not rollover to my 401K and just have it as downpayment on new house, I would buy? Is there a penalty?
I would really appreciate your help. I have a contract with contingency on our house that expires in 3 days. We have to make decision to resign the contract until the buyer straigtens out the financing or take the house off the market and do what I just described above. Basically, I'm on time constraint at this point. Thank you very much..

Will you should let the judge tell you guys what to do

I see some problems with this. If you are currently on the deed and the mortgage, he will need to refinance to get you off both. So a lot depends on how much equity you have in the house. If he can get refinancing and you agree to accept the value of his 401K. Then this could work.

There are special rules for when a 401K is transferred as part of a divorce. This site might help you understand the options:

401khelpcenter.com - In a Divorce, Who Gets the 401k? (http://www.401khelpcenter.com/mpower/feature_060199.html)