Internal Revenue Section Code 1041
With April 15th fast approaching, we, like many of you, are turning our attention to taxes. For couples contemplating a divorce or in the process of a divorce one of the most important tax provisions to be aware of is Internal Revenue Code section 1041 which addresses the transfer of property between spouses or former spouses. This section provides that any transfer of property from one spouse to another is a nontaxable event. This means that no deductible loss or taxable gain is declared on a qualifying transfer. This section applies to transfers during marriage as well as during divorce. Section 1041 was part of reforms intended to simplify the Internal Revenue Code.