DIVORCE, TAXATION, AND STOCK OPTIONS Divorce can be a significant interruption to a household's fin

In keeping with other elements of the tax code that give choice to married individuals, Internal Revenue Code (IRC) Section 1041 was enacted to relieve the transfer of possessions in a divorce by not acknowledging gain or loss. Instead, the code alleviates a transfer in the method it alleviates gifts. The transferor's tax basis is communicated along with the asset to the other spouse with minimal exposure to tax. This applies to most divorce-related transfers. A typical possession that falls under this type of transfer, is the individual residence. A partner will receive the home and the transfer of the title would usually be considered, a tax-free transfer.