Message Font: Serif | Sans-Serif
No. of Recommendations: 0
Ok. So basically our combined income will be considered "community", correct?

I don't know. That's the issue here, and probably one for the lawyers.

With one spouse in a community property state and one not, I don't know how to determine community property income.

Now, I am a little unclear about your above statement "If it's community income, it goes 1/2 to each spouse.". Does that mean if I have a cap gain of say $x for the year, I show half of it (my portion) on our CA return, i.e. $x/2? Or do I show all of it?

Well, all of it will go in the worldwide income column, and 1/2 will go in the CA source income column. From a practical standpoint, 1/2 if it is taxable to CA.

I just want to get to the moral of the whole story here. Can I save anything at all or nothing?

Yes, a savings is definitely possible. There are three possibilities.
-Your separate income. Fully taxable to CA.
-Community income. 1/2 taxable to CA.
-Your wife's separate income. Not taxable to CA.

Print the post  


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.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
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.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! 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.