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-WHEN RETIREMENT PLANS OR IRAS ARE DIVIDED IN A DIVORCE, WHAT HAPPENS?-

Posted by Admin Posted on June 11 2020

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If in accordance with the qualified domestic relations order or other order of the court in the case of an IRA, these plans are separated as non-taxable. However, this is the case only if the assets stay in the retirement account or IRA. Once the funds are allocated, they will be taxed to the recipient. The payer does not get the benefit of a deduction and the recipient does not have taxable income when divided.

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Source: Thomson Reuters

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