According to section 1001(c) of the Internal Revenue Code (IRC § 1001(c)), all realized gains and losses must be recognized "except as otherwise provided in this subtitle.
"[1] While the general rule of recognition applies in most cases, there are actually several exceptions located throughout the Internal Revenue Code.
A second, similar, mechanism exists in §1041, requiring the recipient of marital property in a divorce settlement to take the basis of the transferring spouse.
The good news is that the recipient in both cases has received a "free" gift.
Therefore, the taxpayer will likely incur the same (higher) tax liability that the donor would have paid if they had kept the property for themselves.