Experienced Bay Area family law attorneys will inform their clients if they are transferring property to a non-resident alien spouse.
Are there different rules for property division in a divorce if my spouse is not a US Citizen?
Yes. A transfer to a non-resident alien spouse is specifically excluded from §1041 which means that IRC §1041 (and the rule of no tax treatment) does not apply if a transfer is TO a non-resident alien.
Non-taxable treatment does apply if the transfer is FROM a non- resident alien to a US resident or citizen. These transfers become fully taxable subject to capital gains/losses.
Further complications can arise if a non-citizen spouse ceases to be considered a US resident before the property is fully divided and or an equalizing note is fully paid.
If you are interested in learning more, you can contact me at Amanda@gordonfamilylaw.com for more information.