[quote=”brian.rockwell”]Husband and wife getting divorce. As part of the divorce decree they are to split his IRA 50/50. He takes a withdrawal for half of the value of his IRA. Does not withhold taxes as he is going to have his ex-wife deposit this amount into a new IRA set up for her within 60 days. Is the 60 day rollover allowed or is this in fact a taxable distribution?[/quote]

Brian,
If the divorce decree says she is supposed to get ½, the language used should be carefully reviewed to determine who should pay the income tax on the amount. Generally, the decree will say that she would pay the taxes on the amount, if it is distributed; and in such a case, the amount would usually be moved to her IRA via a transfer so she can take a distribution if she wants to. Further, he should not take a distribution of the amount in such a case.

He would only take a distribution of the amount if the decree says that he is responsible for paying taxes on what she gets; and in such a case, the distribution would be reported in his name and SS# and cannot be rolled over to her IRA. If that is not the case, he should rollover the amount back to his IRA- within 60-days, and follow the procedure above. Of course, the rollover is permissible if he has not already rolled over a distribution from that IRA within the one-year period.

First step..review the language in the decree.

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