I recieved $20k from a divorce decree. My exwife and I owned a business and she bought me out. She paid me with shares from a pre-tax 401(k) fund via a DRO. Is this taxable income for me?

[Opus 17]

If you recieved part of your spouse's 401(k) pursuant to a QDRO, you have 3 options.

1. Roll the money over into your own retirement account (and pay tax when you withdraw the money in retirement).

2. Take a lump sum distribution and pay regular income tax but not the 10% penalty for early withdrawal.

3. Take annuitized distributions over your expected life time and pay regular income tax but not the 10% penalty.

You should have received a 1099-R from your spouse's retirement plan, enter it in Turbotax exactly as you received it.