The IRS Does Not Consider Property Settlements in Consideration of Marriage

question 54

Essay

The IRS does not consider property settlements in consideration of marriage as being transfers for valuable consideration. Consequently, such prenuptial settlements are subject to the Federal gift tax. Why, then, are property settlements incident to divorce exempt from the gift tax?

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Definitions:

Andrew Johnson

was the 17th President of the United States, serving from 1865 to 1869, best known for his efforts to reunify the nation post-Civil War and his subsequent impeachment.

Homesteads

Parcels of land granted by the government, often under conditions of residence and cultivation.

Andrew Johnson

The 17th President of the United States, who served from 1865 to 1869, known for his efforts in post-Civil War Reconstruction and conflicts with Congress.