Is transferring my share to my spouse taxable?

No gain or loss at the transfer

Under IRC section 1041, as explained in IRS Publication 504 and Publication 523, a transfer of property between spouses, or to a former spouse incident to divorce, is generally not treated as a sale for tax purposes. You deed your share to your spouse, and neither of you reports a gain or a loss because of that deed.

Generally is doing real work there. Ask your CPA.

The 1 year and 6 year windows

Publication 504 says a transfer is incident to divorce if it happens within 1 year after the marriage ends, or if it's related to the end of the marriage, which means it's under the divorce or separation instrument and happens within 6 years. A transfer outside those windows may be treated differently, so the date on the deed is worth planning with your attorney and CPA.

If you're also changing the loan, remember the deed and the mortgage are separate; see does a quitclaim deed take me off the mortgage?

Dates matter here.

Basis follows the house

There's a catch for the spouse who keeps it. Publication 504 says the spouse who receives the house takes over the transferor's tax basis, so the original cost travels with the property. When that spouse sells someday, the gain is measured from that carried-over basis, not from the value on the day of the transfer, and Publication 523 lets them count the transferring spouse's ownership time as their own.

That's why a buyout figure and a sale figure aren't always equal in value after tax. Your CPA can run both. For the exclusion limits, see do we still get the $500,000 exclusion?

Getting the timing right

Most of this comes down to planning the deed. If the house is being transferred as part of your settlement, ask your attorney to make sure the transfer falls within the windows in Publication 504 and that the instrument says what it needs to say. Ask your CPA what it means for your return. Plan the date. Don't leave it to chance. Keep a copy of the recorded deed with your tax records.

If you're selling to an outside buyer instead, the exclusion rules in Publication 523 are the ones to ask about.