The transfer would be tax-free.
The transfer would also be exempt from gift tax. It would qualify for the marital deduction.
You would also be transferring your basis of the property to your spouse, although you do have an option of making a special election to treat the transfer at Fair Market Value in the year the transfer is made. If you make this election, naturally you would recognize the capital gain for the fair market valuation, if any, the year of the transfer.
