Is there is a step-up in tax basis as a result of dividing martial property in a divorce case?

The division of marital property and the award of same to either party does not result in a stepped-up tax basis. That means that when either party may sell any property they were awarded in the divorce proceeding, then the tax basis would not be stepped-up to value of the property on the date of the Judgment of Dissolution of Marriage, but the tax basis would remain the same as it was for either party prior to the Judgment of Dissolution of Marriage being entered.

Generally there is no step up in basis. The transfer of property between spouses in divorce does not trigger a gain or loss, pursuant to IRC Section 1041. As a result, these transfers are similar to gifts, where the basis of the person making the gift becomes the tax basis of the person receiving it.

The tax basis is not stepped-up. The original tax basis controls property divided in divorce.