topic As part of a divorce my spouse was given 50% of funds from an IRA. Sent 1099R to pay for the tax on withdrawn amount. Is there a way to identify my x as owner of funds? in Retirement tax questions

As part of a divorce my spouse was given 50% of funds from an IRA. Sent 1099R to pay for the tax on withdrawn amount. Is there a way to identify my x as owner of funds?

dianesp — Tue, 04 Jun 2019 19:28:26 GMT

It depends. Did the IRA custodian pay your spouse direct...

CarolC — Tue, 04 Jun 2019 19:28:27 GMT

It depends. Did the IRA custodian pay your spouse directly, or did you make the distribution yourself and give the funds to your spouse?

Typically, you would provide the IRA custodian a copy of your divorce decree. The funds would then be transferred into the other spouse's own IRA account. This would be a nontaxable event to the IRA owner.

If you made the distribution in your name, then review your divorce documents. Sometimes there are instructions for these types of tax issues. If the 1099-R is in the name of the IRA owner, then you may end up being responsible to pay the tax. You can also contact the IRA custodian to see if other options are available to you.

Generally, whoever received the IRA distribution is the person responsible for paying the tax. The owner of the IRA shouldn't pay tax on funds that were given to a former spouse as part of a divorce.

See this TurboTax article Getting Divorced for additional information.

If you received a Form 1099-R for the distribution, it in...

dmertz — Tue, 04 Jun 2019 19:28:30 GMT

If you received a Form 1099-R for the distribution, it indicates that you made a distribution from your IRA that is taxable to you and simply gave money, not an IRA, to your ex-spouse. An IRA can be moved incident to divorce only by nonreportable trustee-to-trustee transfer.

If this portion of your IRA was properly moved by trustee-to-trustee transfer to an IRA for your ex-spouse, you must contact the IRA custodian and obtain from them a corrected Form 1099-R showing that $0 was distributed to you.