As part of the divorce agreement,Tyler transfers his ownership interest in their personal residence to Lupe.The house had been jointly owned by Tyler and Lupe and the adjusted basis is $520,000.At the time of the transfer to Lupe,the fair market value is $800,000.What is the recognized gain to Tyler,and what is Lupe's basis for the house?
A)$0 and $520,000.
B)$0 and $800,000.
C)$140,000 and $520,000.
D)$280,000 and $800,000.
E)None of these.

Question

Quizplus · Accepted Answer

Section 1041 provides for nontaxable exchange treatment for the transfer of Tyler's ownership interest in the house to Lupe.Therefore,Lupe has a carryover basis of $520,000.

As Part of the Divorce Agreement,Tyler Transfers His Ownership Interest