I.R.C. Section 1041 provides that no gain or loss is recognized on a transfer of property from a spouse or a former spouse to a spouse or former spouse if the transfer is incident to a divorce. The parties cannot elect out of it. The section is applicable even if the spouse or former spouse pays consideration for the property by giving up rights, transferring other property, or paying cash.
Your spouse will continue with the same cost basis for assets as if it was not purchased by your spouse because it was part of the divorce.
You will not report any sale or income from the transaction.
[Edited: 01/26/2022 | 12:55p PST]
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
