Transfers Between Spouses Sopot accommodationGenerally, no gain or loss is recognized on a transfer of propertyfrom an individual to (or in trust for the benefit of) a spouse or, ifincident to a divorce, a former spouse. This nonrecognition rule doesnot apply if the recipient spouse or former spouse is a nonresidentalien. The rule also does not apply to a transfer in trust to theextent the adjusted basis of the property is less than the amount ofthe liabilities assumed plus any liabilities on the property. Any transfer of property to a spouse or former spouse on which gainor loss is not recognized is treated by the recipient as a gift and isnot considered a sale or exchange. The recipient's basis in theproperty will be the same as the adjusted basis of the giverimmediately before the transfer. This carryover basis rule applieswhether the adjusted basis of the transferred property is less than,equal to, or greater than either its fair market value at the time oftransfer or any consideration paid by the recipient. This rule appliesfor purposes of determining loss as well as gain. Any gain recognizedon a transfer in trust increases the basis. alloggi scontati ManilaA transfer of property is incident to a divorce if the transferoccurs within 1 year after the date on which the marriage ends, or ifthe transfer is related to the ending of the marriage. For moreinformation, see Property Settlements in Publication 504,Divorced or Separated Individuals.