My client is self employed and will file MFS. For purposes of figuring a community property adjustment do I reduce his net Scheudle C income by 1/2 of SS tax, SEP, or SE health insurance? Or do I just compare his net Scheudle C to her wages. All investment income is from assets acquired before marriage.
-
-
Community Property
The initial allocation appears to be based on net profit from the bottom line of Schedule C, without regard to adjustments that appear on the front page of Form 1040.
But it also seems like the adjustments themselves may have to be evenly split...
I'm not sure about this one.
BMKBurton M. Koss
koss@usakoss.net
____________________________________
The map is not the territory...
and the instruction book is not the process. -
I browsed a bit also and don't have an answer. If I understand correctly, when you split Sched C income the person that does not participate in the SE activity is not subject to the SE tax, only the income tax. With that reasoning it would seem the person that is receiving the allocated sched C income would not be allowed to reduce the Sched C income by 1/2 of SS tax, SEP, or SE health insurance.
Again, I do not know this to be fact.Comment
Comment