Section 1041: The High Price of Quick Fix Reforem in Taxation of Interspousal Transfers


Leon Gabinet


In framing this legislative response to the Davis decision, the drafters have created a number of problems, the most serious being the absence of a definition of the term "property" for the purposes of this section. In addition to this definitional deficiency, there are a number of vexing problems connected with the new provision which appear not to have been clearly foreseen and which are closely related to other tax policy issues. Thus, for example, there is the problem of encumbrances placed on property prior to an interspousal transfer; the question of whether a system based on private ordering of tax consequences of divorce should include the right to opt for taxable interspousal transfers; the extension of nonrecognition treatment to nondivorce transfers; and the absence of a netting principle in the interrelation between section 1041 and the new section 71 alimony provisions. All of these issues are considered in this Article.


IRC 1041

Publication Date


Document Type


Place of Original Publication

American Journal of Tax Policy

Publication Information

5 American Journal of Tax Policy 13 (1986)

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