§ 1041 Transfers of property between spouses or incident to divorce

OLRC 119-134 · eCFR 2026-10-19 · 2 regs · 2 amending Acts · cited by 10 sections

Enacted 1984 · Pub. L. 98-369 Amended · 2 Acts

198419861988(a) General rule(b) Transfer treated as gift; transferee has transferor’s basis(c) Incident to divorce(d) Special rule where spouse is nonresident alien(e) Transfers in trust where liability exceeds basis
Connections Cited by 10 · Cites 0
§ 1041 Transfers of property between spouses or incident to divorce
    § 1.1041-1T Treatment of transfer of property between spouses or incident to divorce (temporary).§ 1.1041-2 Redemptions of stock.

    Cases: Blatt v. Commissioner, 102 T.C. 77 (1994); Young v. Commissioner, 113 T.C. 152 (1999); Godlewski v. Commissioner, 90 T.C. 200 (1988)

    Final rules 1

      (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)—

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        (1) a spouse, or

        (2) a former spouse, but only if the transfer is incident to the divorce.

        “a transfer of property from an individual to (or in trust for the benefit of)” Enclosing § 1041(a)
        Textual readingALL OF= no gain or loss recognized
        “a former spouse”
        “only if the transfer is incident to the divorce.”
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          (b) Transfer treated as gift; transferee has transferor’s basis In the case of any transfer of property described in subsection (a)—

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            (1) for purposes of this subtitle, the property shall be treated as acquired by the transferee by gift, and

            (2) the basis of the transferee in the property shall be the adjusted basis of the transferor.

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              (c) Incident to divorce For purposes of subsection (a)(2), a transfer of property is incident to the divorce if such transfer—

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                (1) occurs within 1 year after the date on which the marriage ceases, or

                (2) is related to the cessation of the marriage.

                (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.

                Amended 1988
                • 1988 Pub. L. 100-647 Pub. L. 100–647 substituted “Subsection (a)” for “Paragraph (1) of subsection (a)” and “the spouse (or former spouse)” for “the spouse”.

                (e) Transfers in trust where liability exceeds basis Subsection (a) shall not apply to the transfer of property in trust to the extent that—

                Amended 1986

                (1) the sum of the amount of the liabilities assumed, plus the amount of the liabilities to which the property is subject, exceeds

                (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.