Publication 550 |
2000 Tax Year |
Transfers Between Spouses
Generally, no gain or loss is recognized on a transfer of property
from an individual to (or in trust for the benefit of) a spouse or, if
incident to a divorce, a former spouse. This nonrecognition rule does
not apply if the recipient spouse or former spouse is a nonresident
alien. The rule also does not apply to a transfer in trust to the
extent the adjusted basis of the property is less than the amount of
the liabilities assumed plus any liabilities on the property.
Any transfer of property to a spouse or former spouse on which gain
or loss is not recognized is treated by the recipient as a gift and is
not considered a sale or exchange. The recipient's basis in the
property will be the same as the adjusted basis of the giver
immediately before the transfer. This carryover basis rule applies
whether the adjusted basis of the transferred property is less than,
equal to, or greater than either its fair market value at the time of
transfer or any consideration paid by the recipient. This rule applies
for purposes of determining loss as well as gain. Any gain recognized
on a transfer in trust increases the basis.
A transfer of property is incident to a divorce if the transfer
occurs within 1 year after the date on which the marriage ends, or if
the transfer is related to the ending of the marriage. For more
information, see Property Settlements in Publication 504,
Divorced or Separated Individuals.
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