As part of the divorce agreement,Hale transfers his ownership interest in their personal residence to Monica.The house had been jointly owned by Hale and Monica and the adjusted basis is $410,000.At the time of the transfer to Monica,the fair market value is $600,000.What is the recognized gain to Hale,and what is Monica's basis for the house?
A)$0 and $410,000.
B)$0 and $600,000.
C)$95,000 and $410,000.
D)$190,000 and $600,000.
E)None of the above.

Question

Quizplus · Accepted Answer

Under IRS rules, transfers of property between spouses or incident to divorce are generally not taxable events. Therefore, Hale recognizes no gain, and Monica's basis in the house is the same as the adjusted basis, $410,000.

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