UNFORTUNATELY, most divorce lawyers are clueless about taxes. That means the 50/50 split they propose might be more like 60/40 after taxes are taken into account. So, brush up on the basics before you sign the papers.

Generally, you can make unlimited tax-free transfers of investment assets held in taxable accounts (or in your safe deposit box or under the mattress for that matter) between you and your spouse while you are still married. Ditto for later transfers between you and your ex if they are made per the divorce property settlement. (This assumes both spouses are U.S. citizens.) After such a tax-free transfer, the new owner's tax basis in the investment is the same as the old owner's, and the new owner's holding period includes that of the old owner.

Say, for example, your property settlement calls for you to give some of your long-held General Electric shares to your ex. There's no immediate tax impact. Your ex steps into your shoes and keeps going under the same tax rules that would apply if you still owned the stock. If the stock was jointly owned or community property, nothing changes taxwise for your ex after he or she becomes the sole owner of some or all of the shares. When your ex sells, he or she will owe the federal capital gains tax, plus any state and local taxes.

That's the catch. When you end up owning appreciated investments, they come with a tax liability attached. The bigger the gain, the bigger the built-in tax bill. So from a net-of-tax point of view, appreciated investments are worth less than an equal amount of cash or stuff that has not appreciated.

The moral: Use net-of-tax figures to make your property settlement. For example, say the objective is to divide everything 60/40. Reduce the value of any appreciated investments by the built-in tax liability. Then use those net-of-tax values to arrive at the desired 60/40 split. Our Property Settlement Calculator will help you do it.

What about postdivorce transfers? You have to be careful. They are tax-free if and only if they are considered "incident to divorce." Transfers within one year after the split automatically pass this test. For later transfers, you must show that they are "related to the cessation of the marriage," and they must occur within six years of the divorce. If you plan to make transfers more than one year after the magic date, make sure your divorce papers clearly identify all these transactions as being part of your property settlement. Otherwise, you could be treated as making a deemed taxable sale to your ex (hello tax bill) or a deemed gift, which might use up part of your gift and estate-tax exemptions.

Also know this: The IRS says the postdivorce tax-free transfer privilege only applies to capital gain assets. So if you transfer investments with accrued ordinary income (such as Treasury securities or corporate bonds between interest payment dates, stock shares after the ex-dividend date but before the payment date or U.S. savings bonds), you are taxed on the ordinary income. However, any built-in capital gain becomes your ex's tax problem.

Finally, see our sections on retirement accounts and stock options for explanations of the tax rules relating to those assets.