Hello andy,

As far as taxes due on cashing in the stock options, that will be your husband's responsibility.

Any property, including cash, that you receive as part of a divorce settlement is not treated as taxable income to you. So the money you receive for your stake in the house will not be taxable.

If your husband were required to take an early distribution from his 401k plan as part of a court order in connection with your divorce, then he would not pay a penalty on the early distribution. However, if the funds from that account are simply being rolled over in to to another qualified plan for you (your own IRA), then you will pay a 10% penalty on any withdrawals you take prior to age 59-1/2.

As far as claiming the children, if you are the parent with whom the children live for most of the year, then you are the one entitled to claim them as dependents. You may release your claim to the exemption for one or both children if you choose to do so, but legally you are the one entitled to claim them if they live with you for most of the year.

For each child that you claim, it will reduce your taxable income by $3,650 for the year. In addition, if you are in a low enough income bracket, you may also qualify for an extra Earned Income Credit, which would be much higher if you claim both children. You must have at least some earned income from a job in order to claim this credit.

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Thank you andy.

Thank you andy.