§408(d)(6) IRA transfers and §223(f)(7) HSA transfers pursuant to divorce decree are tax-free — no rollover rules apply.
Contrary to normal IRA/HSA rules, transfers pursuant to a divorce or separation instrument are NOT taxable events and don't count against 60-day rollover or once-per-year rules. IRA: §408(d)(6). HSA: §223(f)(7). Roth IRA holding period carries over. Must be direct trustee-to-trustee with copy of decree. Failing to properly document turns the transfer into a taxable distribution + penalty.
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A Qualified Domestic Relations Order splits qualified plans between spouses with no 10% penalty and no tax.
Three flavors of §6015 relief remove joint liability for a spouse's understated tax, deficiency, or unpaid balance.
Grantor trust for the benefit of an ex-spouse shifts income taxation to the lower-bracket recipient post-TCJA.
A properly-drafted marital agreement locks down separate ownership of pre-marital and gift/inherited assets.
In the year of separation, MFS can beat MFJ when incomes are lopsided, deductions are personal, or spouse is untrustworthy.
Divorced spouses can still both claim §121 use/ownership tests via §121(d)(3) tacking — up to $500K exclusion preserved.
Property transfers between spouses (or ex-spouses within 1 yr / incident to divorce within 6 yrs) are tax-free.
With alimony non-deductible post-2018, restructure as property transfers, HSA/IRA splits, and unallocated support.