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    Karen28's Avatar
    Karen28 Posts: 2, Reputation: 1
    New Member
    		  
    #1

    Oct 2, 2006, 06:55 PM
    Retirement Withdrawal
    I was awarded a large sum of money from my ex-spouse's retirement account. Federal taxes were taken out the lump sum amount and I used the balance to purchase a home. Do I need to claim these funds received as income to me on my Federal Tax Return? Thanks for any help on this question.

    Karen
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #2

    Oct 3, 2006, 07:57 PM
    Karen:

    It depends on whose name is on the Form 1099-R, which you may or may not get. Call the retirement account custodian to determine under whose name was the money withdrawn.

    If it was drawn out under your name, then you are liable for the taxes. If it was drawn out under your ex-spouse's name, then he is liable.

    I had a similar situation with one of my clients this past tax year.
    ScottGem's Avatar
    ScottGem Posts: 64,966, Reputation: 6056
    Computer Expert and Renaissance Man
    		  
    #3

    Oct 4, 2006, 06:17 AM
    Also, if fed taxes were withheld, that may not be your full tax liability. Generally 20% is withheld from a retirement plan distribution. But your actual tax liability depends on your annual income. You won't know exactly how much you owe until you file your return.
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #4

    Oct 4, 2006, 05:07 PM
    ScottGem's points are well-taken!
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