§ 1041. Transfers of property between spouses or incident to divorce

• (a) No gain or loss shall be recognized on a transfer of property from an individual to (or in trust for the benefit of)—
  • (1) a spouse, or
  • (2) a former spouse, but only if the transfer is incident to the divorce.
• (b) In the case of any transfer of property described in subsection (a)—
  • (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.
• (c) For purposes of subsection (a)(2), a transfer of property is incident to the divorce if such transfer—
  • (1) occurs within 1 year after the date on which the marriage ceases, or
  • (2) is related to the cessation of the marriage.
• (d) Subsection (a) shall not apply if the spouse (or former spouse) of the individual making the transfer is a nonresident alien.
• (e) Subsection (a) shall not apply to the transfer of property in trust to the extent that—
  • (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.