The House or the IRA? After-Tax Value in a Divorce
In a divorce, is the house worth the IRA it is traded against, after tax? Every piece below can be linked to, so it opens in a window on your reader's screen, current as of the record. No form to fill in.
2026 law · Reviewed September 7, 2026 · The full page, with methodology and sources · the terms · All tools
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The house's value, mortgage, and cost, the IRA, and your rates in; each asset's after-tax value, the difference, and the IRA that would match the house out. In a frame it carries no cookies, no tracking, and a visible link back to the methodology. Your site has to allow frames; most do. The link that opens it in a small window is on the professionals page.
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- In plain words.
- A common settlement gives one spouse the house and the other the retirement account, at matching numbers. But the house carries a mortgage, the cost of selling it one day, and tax on its profit above what a single person can exclude; the retirement account carries income tax on every dollar taken out, and a penalty before 59½. This tool takes both assets and your tax rates and shows what each is worth after those costs, and how large the retirement account would have to be to truly match the house.
- Why it matters.
- This is the biggest trade in most divorces, and it is usually made on the statement numbers. The after-tax numbers can differ by a hundred thousand dollars or more.
- An example.
- A house worth $800,000 with a $200,000 mortgage, bought for $300,000, against a $600,000 IRA. After selling costs and the tax on the gain, the house is worth about $522,000; after 24 percent income tax, the IRA is worth $456,000. To match the house, the IRA would need to be about $686,000.
- Where it stops.
- It uses today's values and your rates. It cannot know what the house will be worth later or what rate the IRA will be taxed at when withdrawn, and it does not include the cost of carrying the house on one income. The pension version of this question needs an actuary.
The facts
Six quotable sentences on trading the house for the retirement account.
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- The house comes with its mortgage, the cost of eventually selling it, and the tax on its gain; the IRA comes with ordinary income tax on every dollar. Two assets at the same number on the settlement sheet are rarely worth the same to the spouse who takes each.
- After a divorce the spouse who keeps the house has the single filer's $250,000 exclusion on the gain, not the couple's $500,000, and the other spouse's years in the home count toward the two-of-five test (§ 121(d)(3)).
- An IRA received in a divorce is the recipient's own IRA; withdrawals before 59½ carry the 10 percent additional tax. A 401(k) share taken under a qualified domestic relations order does not, which is a reason to draw cash from the plan before rolling the rest.
- Example: a house worth $800,000 with a $200,000 mortgage, bought for $300,000, against a $600,000 IRA. After selling costs and the tax on the gain above the exclusion, the house is worth about $521,700; after 24 percent tax, the IRA is worth $456,000. To match the house, the IRA would need to be about $686,447.
- The house's number also depends on the spouse's ability to carry it: the mortgage, the taxes, and the upkeep on one income, which the sell-or-keep tool prices.
- Neither asset's future is certain: the house may appreciate or not, and the IRA's tax depends on the rate when it is withdrawn. The comparison is at today's figures and today's rates, which is what the settlement is signed against.
What each asset carries
Why the same number is not the same value.
The button shows exactly what your reader sees when they click the link. Paste the link where a link goes; it opens this table in a small window, always current as of the record, with the attribution and a link to the full page. Nothing to copy out, nothing to update later.
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| Asset | What comes off the top | Rate |
|---|---|---|
| The house | The mortgage; selling costs; capital gains tax on the gain above the single filer's exclusion | $250,000 excluded; 15% or 20% on the rest, plus the 3.8% surtax where it applies |
| A traditional IRA or 401(k) | Ordinary income tax on every dollar withdrawn; the 10% penalty before 59½ (not from a plan under a court order) | The recipient's bracket |
| A Roth account | Nothing, once qualified | 0% |
| A brokerage account | Capital gains tax on the built-in gain; the basis carries over (§ 1041) | 15% or 20% |
Cite and link.
The clean address, a citation generated from the record so it can never carry a stale review date, and an address for every section so you can point a reader at the exact table or method.
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- Link
- https://consideratecapital.com/tools/house-or-ira-in-divorce
- Citation
- Considerate Capital, "The House or the IRA? After-Tax Value in a Divorce," reviewed September 7, 2026, https://consideratecapital.com/tools/house-or-ira-in-divorce.
Link to a section
- The calculator https://consideratecapital.com/tools/house-or-ira-in-divorce#calculator
- The facts https://consideratecapital.com/tools/house-or-ira-in-divorce#facts
- What each asset carries https://consideratecapital.com/tools/house-or-ira-in-divorce#key-numbers
- How the comparison works https://consideratecapital.com/tools/house-or-ira-in-divorce#how-it-works
- Methodology https://consideratecapital.com/tools/house-or-ira-in-divorce#methodology
- Sources https://consideratecapital.com/tools/house-or-ira-in-divorce#sources
- Revision history https://consideratecapital.com/tools/house-or-ira-in-divorce#revision-history
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