Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (32) | Ignore Thread Prev | Next
Author: damastr One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 120784  
Subject: Re: Captial Gains for State Return Date: 3/12/2006 9:28 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0

Assuming that we can nail it down as separate property, it's easy. If it's the CA spouse's gain, it is taxable to CA. If it's the FL spouse's gain, its not taxable to CA.


I was hoping for that answer, which sounds very reasonable.


For community property, I'd take a different tack. I'd report 1/2 of the gain in each state - CA and FL. (Of course, reporting 1/2 of it in FL is rather moot since they don't have an income tax.)

Exactly


You will need to use the CA non- and part-year resident form, 540 NR. As you work through it, you'll find that you need to do two things. First, you need to report ALL of your joint worldwide income using CA rules. You might need to adjust some items to do that - like the state tax refund isn't taxable, nor are your state income taxes deductable. Once you do that, you get to your CA law AGI and itemized deductions.


I am assuming Turbotax does that all very efficiently.


Then you go back and identify all of your income items as either CA source or non-CA source. Here's where things get funny. Remember that we've got to deal with community property issues. And since you're married your wages are community property. 1/2 of your wages are CA income and 1/2 are FL. Likewise with your spouse. 1/2 of her wages are FL income and 1/2 are CA. (I did mention this was fun, didn't I?)

Then you get to play the same game with all of your other income sources: interest, dividends, capital gains, and so on. If they're community property, it's 1/2 CA and 1/2 FL. If they're separate property, they go to the state where the spouse is resident.


Ok. Makes sense, but that brings to me to my earlier questions
"Does it just boil down to mere technicality of what kind of account it is? If so, I might as well have carried out all transactions from my wife's individual account and we would have been able to save all the state income tax on those gains (FL does not have any state income tax), correct?"
I mean, if I make all transactions from my wife's individual account for year 2006, all the gains that arise of those would NOT be taxable in CA.
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (32) | Ignore Thread Prev | Next

Announcements

Disclaimer:
In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
2013 Feste Award Voting Begins!
Who will win the 2013 Feste Award? Vote now for the Fool that most exemplifies the Fool Community mission of Learning Together!
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Post of the Day:
Berkshire Hathaway

Reestablishing the Middle Class
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement