Pre-1984 Divorce and CA basis - Spidell

Pre-1984 Divorce and CA basis

Log in to Post

Message Board Pre-1984 Divorce and CA basis

This topic contains 1 reply, has 2 voices, and was last updated by Lynn Freer 1 week, 5 days ago.

  • Author
  • #184094
    Jerry Lopatin

    I have a client who divorced in 1981, prior to the enactment of IRC 1041 in 1984, and received the marital house.  As a result, she receives a step-up in basis under Federal law, equal to the increase in value taxed by the transfer of the house from her ex-spouse.

    However, what is the correct California treatment?  Did CA follow the 1962 US Supreme Court ruling US v. Davis, making inter-spouse transfers taxable until IRC 1041 was enacted?   It seems like it is ancient history, and hard to research.


  • #184144
    Lynn Freer

    Hi Jerry,

    I went through the old forms and instructions for 1984 and 1985. There is discussion of difference in basis for inherited property but nothing about property acquired in a divorce. The code was redone after the 1986 act and I don’t have immediate access to it. You could post a question on the FTB’s website – ask a legal expert. But if it were me, I’d pick up the federal numbers as I can’t find anything to indicate there is a difference.