Internal Revenue Code · 26 U.S.C.

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

In force Text current through Public Law 119-121 (October 9, 2026) release point 119-121

Official text, no changes From the Office of the Law Revision Counsel, release point 119-121 (current through Public Law 119-121 (October 9, 2026)). Compare it with the official text at uscode.house.gov (external site).

Cite as 26 U.S.C. § 1041

At a glance

Read from the text, the source credit and the official notes. Not part of the law.

Status: In force
Added: July 18, 1984 by Pub. L. 98–369
Last amended: November 10, 1988 by Pub. L. 100–647
Amendments: 2 dated changes in the source credit
Length: 5 subsections · 303 words · about 1 min to read
Cross-references: cites 0; cited by 10 Code sections and 20 other regulations
Regulations: 2 issued under this section

¶(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)—

¶(1) a spouse, or

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

¶(b) Transfer treated as gift; transferee has transferor’s basis 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) Incident to divorce 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) 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.

¶(e) Transfers in trust where liability exceeds basis 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.

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.

(Added Pub. L. 98–369, div. A, title IV, § 421(a), July 18, 1984, 98 Stat. 793; amended Pub. L. 99–514, title XVIII, § 1842(b), Oct. 22, 1986, 100 Stat. 2853; Pub. L. 100–647, title I, § 1018(l)(3), Nov. 10, 1988, 102 Stat. 3584.)

Regulations under this section

Treasury regulations (26 CFR) issued under § 1041

Cross-references

Computed from the citations in the text of Title 26 and 26 CFR.

Cited by 10 Code sections

Cited in 20 regulations not issued under it

Amendment history

From the source credit and the official notes, newest first.

November 10, 1988Amended by Pub. L. 100–647Parts changed in 1988: (d)
October 22, 1986Amended by Pub. L. 99–514Parts changed in 1986: (e)
July 18, 1984Added by Pub. L. 98–369

Where it sits in the Code

Nearby sections

Official notes

Show the Law Revision Counsel's notes (amendments, effective dates)

Editorial Notes

Amendments

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

1986—Subsec. (e). Pub. L. 99–514 added subsec. (e).

Effective Date of 1988 Amendment

Pub. L. 100–647, title I, § 1018(l)(3), Nov. 10, 1988, 102 Stat. 3584, provided that the amendment made by that section is effective with respect to transfers after June 21, 1988.

Effective Date of 1986 Amendment

Amendment by Pub. L. 99–514 effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984, Pub. L. 98–369, div. A, to which such amendment relates, see section 1881 of Pub. L. 99–514, set out as a note under section 48 of this title.

Effective Date

Pub. L. 98–369, div. A, title IV, § 421(d), July 18, 1984, 98 Stat. 795, provided that:

“(1) In general.— Except as otherwise provided in this subsection, the amendments made by this section [enacting this section and amending sections 47, 72, 101, 453, 453B, 1001, 1015, and 1239 of this title] shall apply to transfers after the date of the enactment of this Act [July 18, 1984] in taxable years ending after such date.

“(2) Election to have amendments apply to transfers after 1983.— If both spouses or former spouses make an election under this paragraph, the amendments made by this section shall apply to all transfers made by such spouses (or former spouses) after December 31, 1983.

“(3) Exception for transfers pursuant to existing decrees.— Except in the case of an election under paragraph (2), the amendments made by this section shall not apply to transfers under any instrument in effect on or before the date of the enactment of this Act unless both spouses (or former spouses) elect to have such amendments apply to transfers under such instrument.

“(4) Election.— Any election under paragraph (2) or (3) shall be made in such manner, at such time, and subject to such conditions, as the Secretary of the Treasury or his delegate may by regulations prescribe.”

Plan Amendments Not Required Until January 1, 1989

For provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§ 1101–1147 and 1171–1177] or title XVIII [§§ 1800–1899A] of Pub. L. 99–514 require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after Jan. 1, 1989, see section 1140 of Pub. L. 99–514, as amended, set out as a note under section 401 of this title.