How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Lev Your Own Question
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 29570
Experience:  Taxes, Immigration, Labor Relations
Type Your Tax Question Here...
Lev is online now
A new question is answered every 9 seconds

When I was divorced, rental property that I received was given

This answer was rated:

When I was divorced, rental property that I received was given a specific value which was higher than when we purchased it. I was told that the new value can be used as the basis when this property is this the case?
Thank you for your question. I look forward to working with you for educational purposes only.

When the property was transferred to you as an award in the divorce, you receive the value of that property at the time it was transferred solely to your ownership. This means that your tax basis for capital gains purposes is based on the value at the time it was transferred to you and you get the stepped up basis.

I truly aim to please you as a customer, but please keep in mind that I do not know what you already know or don't know, or with what you need help, unless you tell me. Please consider that I am answering the question or question that is posed in your posting based upon my reading of your post and sometimes misunderstandings can occur. If I did not answer the question you thought you were asking, please respond with the specific question you wanted answered.

Kindly remember the ONLY WAY experts receive any credit at all for spending time with customers is if you click on OK, GOOD or EXCELLENT SERVICE even though you have made a deposit or are a subscription customer. YOU MUST COMPLETE THE RATING FOR THE EXPERT TO RECEIVE ANY CREDIT.

Also remember, sometimes the law does not support what we want it to support, but that is not the fault of the person answering the question, so please be courteous.

This is NOT the practice of law nor is it legal advice to you, it is merely educational information for you to use to seek out a licensed attorney in your state to get actual legal advice from them. Please use sites such as or or to find a local attorney to get actual legal advice in all matters.
Hi and welcome to our site!
The stepped up basis equal to the value of the property at the time of transfer is ONLY available when the property is transferred because of the death of the original owner.

Thus - the information you were given that the fair market value of the should be used as the basis to calculate the gain when the property is transferred as property settlement in the divorce - is not correct.
Sorry if you expected differently.

According to the IRS - generally, there is no recognized gain or loss on the transfer of property between spouses, or between former spouses if the transfer is because of a divorce.
Similarly - the property basis for depreciation and for capital gain calculations would not change.

See for reference IRS publication 504 -‎
page 20 - right column - Basis of property received. Your basis in property received from your spouse (or former spouse, if incident to your divorce) is the same as your spouse's adjusted basis. This applies for determining either gain or loss when you later dispose of the property. It applies whether the property's adjusted basis is less than, equal to, or greater than either its value at the time of the transfer or any consideration you paid. It also applies even if the property's liabilities are more than its adjusted basis.
Customer: replied 3 years ago.
This is to PaulmoJd
Since I received an opposing answer to yours; would you mind telling me what information you based your answer on?
I would love to accept your answer, because it is what I would like to hear, but I would be interested in more information from you.
Thanks, Connie
Hi Connie,
PaulmoJd would not be able to address your question because it was moved to the tax category.
You may contact him directly by posting a new question in the Legal category.

Unfortunately that statement was not correct.
There is NO stepped up basis for any transfers other than when assets are inherited.
Sorry if that doesn't favor your situation.

See for reference IRS publication 504 -‎
page 20 - right column - Basis of property received.

Specifically for determination the basis - see IRS publication 551 -‎
Sorry that you expected differently.
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 29570
Experience: Taxes, Immigration, Labor Relations
Lev and other Tax Specialists are ready to help you