Any realized gain or loss on the transfer of investment property between spouses is not recognized and any property involved has a carryover basis.

Question

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According to the IRS, when investment property is transferred between spouses, any realized gain or loss is not recognized for tax purposes, and the property received by the receiving spouse has a carryover basis from the transferor spouse. This means that the receiving spouse's basis in the property is the same as the transferor spouse's basis, adjusted for any increases or decreases in the property's value since the transferor spouse originally acquired it.

Any Realized Gain or Loss on the Transfer of Investment