What is that basis of stock after a divorce?

October 17, 2005

From:  Kim
Date:  Tue, 27 Sep 2005

Mike,

In a divorce settlement, on pre-marital stock, do you use the price of the stock or the adjusted price to figure the gain or loss?

Thanks so much for your help!

Answer

Date:  Fri, 07 Oct 2005

Hello Kim,

I'm not sure what you mean by the "adjusted price". In almost all cases, the tax basis for the stock and the acquisition date will be the same as if you sold the stock during the marriage. The reason for this is that no gain or loss is recognized when dividing property in most marital dissolutions, so the old tax basis simply carries over.

Good luck!
Mike Gray

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