I.R.C. § 1041(a) General Rule —
No gain or loss shall be recognized on a transfer of property from an individual
to (or in trust for the benefit of)—
I.R.C. § 1041(a)(1) —
a spouse, or
I.R.C. § 1041(a)(2) —
a former spouse, but only if the transfer is incident to the divorce.
I.R.C. § 1041(b) Transfer Treated As Gift; Transferee Has Transferor's Basis —
In the case of any transfer of property described in subsection (a)—
I.R.C. § 1041(b)(1) —
for purposes of this subtitle, the property shall be treated as acquired by the transferee
by gift, and
I.R.C. § 1041(b)(2) —
the basis of the transferee in the property shall be the adjusted basis of the transferor.
I.R.C. § 1041(c) Incident To Divorce —
For purposes of subsection (a)(2), a transfer of property is incident to the divorce
if such transfer—
I.R.C. § 1041(c)(1) —
occurs within 1 year after the date on which the marriage ceases, or
I.R.C. § 1041(c)(2) —
is related to the cessation of the marriage.
I.R.C. § 1041(d) Special Rule Where Spouse Is Nonresident Alien —
Subsection (a) shall not apply if the spouse (or former spouse) of the individual
making the transfer is a nonresident alien.
I.R.C. § 1041(e) Transfers In Trust Where Liability Exceeds Basis —
Subsection (a) shall not apply to the transfer of property in trust to the extent
that—
I.R.C. § 1041(e)(1) —
the sum of the amount of the liabilities assumed, plus the amount of the liabilities
to which the property is subject, exceeds
I.R.C. § 1041(e)(2) —
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.
(Added Pub. L. 98-369, div. A, title IV, 421(a), July 18, 1984, 98 Stat. 793, and amended Pub. L. 99-514, title XVIII, 1842(b), Oct. 22, 1986, 100 Stat. 2853; Pub. L. 100-647, title I, 1018(l)(3), Nov. 10, 1988, 102 Stat. 3584.)
BACKGROUND NOTES
AMENDMENTS
1988--Subsec. (d). Pub. L. 100-647 substituted “Subsection
(a)” for “Paragraph (1) of subsection (a)” and “the spouse (or former spouse)” for
“the spouse”.
1986--Subsec. (e). Pub. L. 99-514 added subsec. (e).
EFFECTIVE DATE OF 1988 AMENDMENT
Section 1018(l)(3) of Pub. L. 100-647 provided that the amendment made by section 1018(l)(3)
of Pub. L. 100-647 is effective with respect to transfers after June 21, 1988.
EFFECTIVE DATE OF 1986 AMENDMENT
Amendment by Pub. L. 99-514 effective, except as otherwise provided, as if included in the provisions of the
Tax Reform Act of 1984, Pub. L. 98-369, div. A, to which such amendment relates, see section 1881 of Pub. L. 99-514, set out as a note under section 48 of this title.
EFFECTIVE DATE
Section 421(d) of Pub. L. 98-369 provided that:
“(1) In general.--Except as otherwise provided in this subsection, the amendments
made by this section [enacting this section and amending sections 47, 72, 101, 453,
453B, 1001, 1015, and 1239 of this title] shall apply to transfers after the date
of the enactment of this Act [July 18, 1984] in taxable years ending after such date.
“(2) Election to have amendments apply to transfers after 1983.--If both spouses or
former spouses make an election under this paragraph, the amendments made by this
section shall apply to all transfers made by such spouses (or former spouses) after
December 31, 1983.
“(3) Exception for transfers pursuant to existing decrees.--Except in the case of
an election under paragraph (2), the amendments made by this section shall not apply
to transfers under any instrument in effect on or before the date of the enactment
of this Act unless both spouses (or former spouses) elect to have such amendments
apply to transfers under such instrument.
“(4) Election.--Any election under paragraph (2)
or (3) shall be made in such manner, at such time, and subject to such conditions,
as the Secretary of the Treasury or his delegate may by regulations prescribe.”
