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In other words, a distribution made to an alternate payee under a
qualified domestic relations order will be taxable to the
alternate payee, and not to the plan participant or beneficiary,
because section 402(e)(1)(A) treats the alternate payee as the
distributee of the distribution. Seidel v. Commissioner, T.C.
Memo. 2005-67.
As relevant herein, section 414(p)(1)(A) defines a
“qualified domestic relations order” as a domestic relations
order “which creates or recognizes the existence of an alternate
payee’s right to, or assigns to an alternate payee the right to,
receive all or a portion of the benefits payable with respect to
a participant under a plan”. The term “domestic relations order”
means any judgment, decree, or order that relates to the
provision of alimony payments or marital property rights to a
spouse or former spouse of a plan participant and that is made
pursuant to a State domestic relations law, specifically
including a community property law. Sec. 414(p)(1)(B); see
Dunkin v. Commissioner, 124 T.C. (2005) (slip op. at 6-7)
(discussing relevant principles of California community property
law).
In the present case, neither party has raised any issue
regarding the status of the Superior Court’s December 1992 order
as a qualified domestic relations order, and there is nothing in
the record that would lead us to question its status as such.
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Last modified: May 25, 2011