EMORY NELSON SUMLIN

v.

NORMA JEAN SUMLIN

1 This tax rate is consistent with the tax rate applied to other retirement accounts.

2 When addressing the equitable distribution plan, the trial court should consider the homestead status, if any, of the former husband’s property, if the court again considers a lien on this property.

3 consequences related to the former husband’s Merrill Lynch retirement account, which he received as part of equitable distribution. The former husband is correct. “Consideration of the consequences of income tax laws on the distribution of marital assets . . . is required and failure to do so is ordinarily reversible error.” Miller v. Miller, 625 So. 2d 1320, 1321 (Fla. 5th DCA 1993); see Diaz v. Diaz, 970 So. 2d 429, 432 (Fla. 4th DCA 2007) (determining that trial court erred in failing to consider tax consequences to former husband’s pension and DROP account when dividing parties’ assets). The purpose of considering tax consequences is to ensure that one party is not “charged with the full value of an asset that is burdened with an inevitable payment of taxes.” Vaccaro v. Vaccaro, 677 So. 2d 918, 922 (Fla. 5th DCA 1996). The trial court should consider the effect of the burden so that neither party gains an unfair advantage or suffers an unfair burden because he or she receives a particular asset in distribution. Id. Accordingly, we reverse for the trial court to consider the tax consequences of the Merrill Lynch retirement account to the former husband, taking evidence if necessary. See Kvinta v. Kvinta, 277 So. 3d 1070, 1073 (Fla. 5th DCA 2019) (reversing and remanding for consideration of consequences of income tax laws on distribution of former husband’s pension). Likewise, the former husband correctly argues that the equitable distribution worksheet contains an error regarding the former wife’s withdrawal of a portion of her 401(k) account. The former wife testified that she withdrew $133,945.07 from her 401(k) in 2015 to make a down payment on her non-marital residence and to pay the penalties and taxes associated with the early withdrawal. The amount withdrawn was 53.60%

4 marital, equaling $57,459.20 after applying a 20% tax rate.1 However, the equitable distribution worksheet credited the former wife with only $28,730. Because the former wife testified that she utilized the full marital portion for her own use, the entire $57,459 marital value of the 401(k) withdrawal should have been allocated to the former wife. Accord Marshall-Beasley v. Beasley, 77 So. 3d 751, 759 (Fla. 4th DCA 2011) (finding that in equitable distribution, former wife properly received $351,112 credit for net amount of former husband’s withdrawal from 401(k) account to purchase property because 401(k) account necessarily was going to be taxed). Accordingly, we reverse the portions of the final judgment relating to the equitable distribution of the parties’ marital assets and liabilities, and remand for a recalculation of the equitable distribution award. Because we must remand, we decline to address the former husband’s claim regarding the trial court’s order that he secure the money awarded to the former wife against the property awarded to him.2 AFFIRMED in part, REVERSED in part, and REMANDED with instructions.