Eugene K. Friscone and Nicole Friscone - Page 8

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          We recognize that although neither the parties nor the State                
          court can authoritatively construe Federal tax law, the agreement           
          as to Federal taxes may nevertheless throw strong light on what             
          was intended in the agreement and decree with respect to the                
          division of the marital property.  This is particularly so since            
          section 1041(a) provides for nonrecognition of gain or loss on a            
          transfer of property incident to a divorce "to (or in trust for             
          the benefit of) a spouse," and section 1041(b)(2) provides that             
          the basis of the transferee "shall be the adjusted basis of the             
          transferor."3                                                               
               It obviously appeared more convenient to cast the divorce              
          decree in terms of percentages of the proceeds to be received,              
          since a satisfactory resolution of the details of the sale under            
          the buy-sell agreement had not yet been negotiated.  Although the           

          3 Sec. 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)--                                                      
                    (1) a spouse, or                                                  
                    (2) a former spouse, but only if the transfer is                  
                    incident to the divorce.                                          
               (b) Transfer Treated as Gift; Transferee Has Transferor's              
               Basis.                                                                 
                         *    *    *    *    *    *    *                              
                    (2) the basis of the transferee in the property shall             
                    be the adjusted basis of the transferor.                          





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