@Oliver7088 wrote:
Sir at no time did I say the word income. Virginia is not a community property state. You've brought up so many techy words today, that my head is spinning. I asked a 1099R question. DFAS controls military pension and annuity issues, and because I don't meet their 10 10 rule, they wont talk to me. It's not being "nit picky" it's just how it is.
Let's try this another way.
The pension is not the monthly check. A pension is an asset, a financial instrument, that has value, and an owner or owners. It may only exist in a computer, but even so, it is an asset. It also generates a certain amount of income under certain circumstances (retirement or disability). The pension is not the monthly check, the pension is the asset that funds the monthly check.
Think of it instead like owning a bunch of government bonds that pay interest. The monthly interest payments are the income, and the bonds themselves are the asset.
Now in a divorce, if one spouse owns a bunch of bonds, the court might order the bonds (assets) to be divided. That division occurs without tax or deduction to either spouse. Now the ex-spouse owns some bonds. The interest payments on those bonds are taxable income to the ex-spouse, even though the transfer of the bonds (the asset) was not taxable.
Back to the military pension. Your ex owns this asset. Now that he is retired, this asset sends him a monthly check or direct deposit, which is based on the value of the asset and his life expectancy.
In 1998, a court ruled that you are part-owner of this asset, because of your contributions to the marriage, moving around, and so on. The military could divide the pension asset into two different assets, one in your name and one in your ex's name (like dividing a portfolio of stocks or bonds). But because of the 10 year rule, they won't do this. But you are still part-owner of the asset. That means you are entitled to part of the income produced by the asset. But, just like if you were transferred half a portfolio of bonds, you owe the income tax on the income you receive from your ownership share of the pension payment.
You said "I received funds direct deposit through military allotment." That's your income. That's your share of the income produced by the pension asset. And you owe income tax on it because it's your income. It's not your ex's income even if the military 1099-R is only in his name. It's your income because of the court order.
In this case, the 1099-R that your ex receives from DFAS does not agree with reality. The reality is that you are a part-owner of the pension, and part of the income is your income. Under federal law, you owe tax on your own income. It's not his income, it's yours, because you own part of his pension. The fact that he is issuing a 1099-R to you is his way of making sure that the paperwork matches reality.
This has nothing to do with community property one way or another, you need to stop thinking about that.
Let's try one more quick example. If you were a 25% owner of a race horse, you would expect to pay tax on 25% of the horse's winnings. You wouldn't think the majority owner should pay all the tax just because they were majority owner. Or you are 25% owner of a gold mine, you pay tax on your share (25%) of the gold that comes out of the mine. The other owner doesn't pay your tax for you.
Here, you are part-owner of the pension. It's your income, and you always owe the tax on your own income.
That's my view, anyway. If you want a different answer, you may want to consult a tax professional.
