Updated July 28, 2026. Quick answer: IRC §1041(c) contains only a one-year rule and the phrase “related to the cessation of the marriage.” The six-year safe harbour is in Temp. Reg. §1.1041-1T(b), Q&A-7. Anyone citing “§1041(c)’s six-year rule” is citing a provision that does not exist — and the regulation also creates a rebuttable presumption against later transfers that the statute does not.
What each source actually provides
| Source | What it says |
|---|---|
| §1041(c) | Within 1 year after the marriage ceases, or “related to the cessation of the marriage” |
| Temp. Reg. §1.1041-1T(b), Q&A-7 | Treated as related if made pursuant to a divorce or separation instrument and within 6 years; and presumed NOT related if not pursuant to such an instrument, or made more than 6 years after |
Two conditions, not one. The six-year safe harbour requires the transfer to be made pursuant to a divorce or separation instrument as well as inside six years. A transfer made informally between former spouses within six years does not get the safe harbour — it gets the presumption against.
The presumption is rebuttable, and that is the practical point
A transfer outside the safe harbour is not automatically taxable. The presumption can be rebutted by showing the transfer effected a division of property owned at the time the marriage ceased. But the burden has moved, which is a materially worse position than being inside the safe harbour — and it is a position people walk into by leaving an asset undivided for years because dividing it was awkward.
Where §1041 does apply, the transferee takes the transferor’s basis, which is where the real cost usually hides.
Sources
IRC §1041(a), (b), (c) and Temp. Reg. §1.1041-1T(b) Q&A-7; §414(p); §72(t)(2)(C) and §72(t)(3)(A); §408(d)(6); §121(a), (b), (d)(3); §7703(a) and (b); §152(e); §2(b)(1)(A)(i); §32(c)(3)(A); §21(e)(5); the repeal of §§71 and 215 by Pub. L. 115-97 §11051 and its effective-date note; IRS Form 8332 (current revision). All read July 2026.
This states what the cited authority says. It is not tax advice, and retirement-plan design turns on facts about your business and your other entities that no page can see. Every dollar limit referenced here is indexed and changes annually.