DIVORCE, TAXATION, AND STOCK OPTIONS Divorce can be a major disruption to a household's monetary pl

In keeping with other aspects of the tax code that give preference to married individuals, Internal Revenue Code (IRC) Section 1041 was enacted to reduce the transfer of possessions in a divorce by not recognizing gain or loss. Instead, the code treats a transfer in the method it alleviates presents. The transferor's tax basis is conveyed along with the possession to the other partner with minimal direct exposure to tax. This uses to a lot of divorce-related transfers. A typical asset that falls under this type of transfer, is the individual residence. A spouse will receive the home and the transfer of the title would almost always be considered, a tax-free transfer.