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LawTalk, Attorney and Counselor at Law
Category: Family Law
Satisfied Customers: 37846
Experience:  30 years legal experience. I remain current in Family Law through regular continuing education.
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As a part of the divorce decree, my husband gave me half of

Customer Question

As a part of the divorce decree, my husband gave me half of his 401k, $50,000.00, I was than to provide him a one time alimony payment for that money. Can I deduct this as an alimony payment to offset the tax burden I will have for early withdrawl of a 401. The company the split the 401 essentially created an account for me and move the money to the new account. I then withdrew all the money per the divorce papers. Wondering if I can deduct the alimony payment against the 401 withdrawl penalty.
Submitted: 2 years ago.
Category: Family Law
Expert:  LawTalk replied 2 years ago.
Good afternoon,
I'm Doug, and I'm sorry to hear of the confusion. My goal is to provide you with excellent service today.
Alimony payments are taxable to the person receiving the payment, and a deduction to the person paying.
While the penalty and the tax deduction will be set out at different places on your return, the fact is that the write off will act as an offset against the taxes you owe which include the early withdrawal penalty.
You may reply back to me using the Reply link and I will be happy to continue to assist you until I am able to address your concerns, to your satisfaction.
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I wish you and yours the best in 2015,