Transfer of Property Between Spouses During Divorce When the Transferee Spouse is a Nonresident Alien
By Anthony Diosdi Generally, no income tax is recognized in a transfer of property between spouses (or former spouses) incident to divorce if both spouses are U.S. citizens or residents. A transfer of property is incident to the divorce if such transfer occurs within one year after the date on which the marriage ceases, or is related to the cessation of the marriage. However, when either husband (“H”) or wife (“W”) are nonresidents, who own real estate, a single family home, for example, in the United States and are in the process of getting a divorce and dividing their assets, the general rule says that if the spouse (or former spouse) of the individual making the transfer is a nonresident alien, the transferor will have to recognize taxable gain upon…