I am currently in the settlement portion of my divorce and my wife get 50% of my 401K. What type of tax penalties will be applied to me for withdrawing the money for her share. Can I take a loan out for her portion and repay overtime.

There should be no tax penalties to you at all. If the divorce decree specifies that she gets 50%, the plan administrator can make a distribution to her (not you), which she can then roll into her own IRA. You will not have to pay the 10% early withdrawal penalty, as long as you have a "qualified domestic relations order" that specifies what she is to get. Talk to your plan administrator to make sure you have the correct paperwork. No need to take a loan.