§ 1041. Transfers of property between spouses or incident to divorce
(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)—
(b)
Transfer treated as gift; transferee has transferor’s basis
In the case of any transfer of property described in subsection (a)—
(c)
Incident to divorce
For purposes of subsection (a)(2), a transfer of property is incident to the divorce if such transfer—
(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
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.