26 U.S.C. § 1041
§ 1041. Transfers of property between spouses or incident to divorce
No plain-English explainer yet. Below is the official text. Explainers are being added section by section.
History
Added in 1984 by the Deficit Reduction Act of 1984. Last changed November 10, 1988 by the Technical and Miscellaneous Revenue Act of 1988.
Every change, newest first (3)
- November 10, 1988Technical and Miscellaneous Revenue Act of 1988
- October 22, 1986Tax Reform Act of 1986
- July 18, 1984Deficit Reduction Act of 1984 · added this section
The law as written
Current through Public Law 119-102. Amendment notes omitted.
Structure
No gain or loss shall be recognized on a transfer of property from an individual to (or in trust for the benefit of)—
a spouse, or
a former spouse, but only if the transfer is incident to the divorce.
In the case of any transfer of property described in subsection (a)—
for purposes of this subtitle, the property shall be treated as acquired by the transferee by gift, and
the basis of the transferee in the property shall be the adjusted basis of the transferor.
For purposes of subsection (a)(2), a transfer of property is incident to the divorce if such transfer—
occurs within 1 year after the date on which the marriage ceases, or
is related to the cessation of the marriage.
Subsection (a) shall not apply if the spouse (or former spouse) of the individual making the transfer is a nonresident alien.
Subsection (a) shall not apply to the transfer of property in trust to the extent that—
the sum of the amount of the liabilities assumed, plus the amount of the liabilities to which the property is subject, exceeds
the total of the adjusted basis of the property transferred.
Proper adjustment shall be made under subsection (b) in the basis of the transferee in such property to take into account gain recognized by reason of the preceding sentence.