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Wife had inoperable cancer and I took cashed out 401k. Can I…

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Wife had inoperable cancer...

Wife had inoperable cancer and I took cashed out 401k. Can I avoid penalty? Should be considered community property.

Accountant's Assistant: The Accountant will know how to help. Please tell me more, so we can help you best.

Can I avoid the penalty under the disability exception for early distribution due to spouse being disabled?

Accountant's Assistant: Is there anything else important you think the Accountant should know?

The disablity was permanent as she passed away.

Accountant's Assistant: What can I say?

Can I avoid the penalty?

Submitted: 4 months ago.Category: Tax
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3/19/2018
Tax Professional: Tax.appeal.168, Tax Accountant replied 4 months ago
Tax.appeal.168
Tax.appeal.168, Tax Accountant
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Tax Professional: Tax.appeal.168, Tax Accountant replied 4 months ago

Regarding the disability exception, it only applies to the participant. You will not be able to avoid the early withdrawal penalty. Sorry. You can refer to the following IRS webpage for more information.

https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-tax-on-early-distributions

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