Rdp----ca

[superman]

Same sex couple came in and needs to file tax return. I know that federal does not reconize an rdp but ca does. Question I have and I think I know the answer but just want to check is for a dependant.

One partner has no income and the second one does the one with no income wants to have the other claim her kid. they live together but the non parent with the income has never adopted the child and is not related in any way. I say no but ofcourse they said that the big chains have put the dep. on the tax returns for years..

Am I corect as to saying no to the dep. being on the non parents tax return?

Thanks,
Superman

[Lion]

Qr

Is the child a qualifying relative?

[Burke]

Sounds to me like the non-parent could not only claim the child, but also the child's parent assuming she supports both, child's income and parent's income is less than $3,700 each, and they lived there all year. See TTB 3-15, Qualifying Relative. Note qualifier about "violating local law" in regard to child's parent.

[Gary2]

Same sex couple came in and needs to file tax return. I know that federal does not reconize an rdp but ca does. Question I have and I think I know the answer but just want to check is for a dependant.

One partner has no income and the second one does the one with no income wants to have the other claim her kid. they live together but the non parent with the income has never adopted the child and is not related in any way. I say no but ofcourse they said that the big chains have put the dep. on the tax returns for years..

Am I corect as to saying no to the dep. being on the non parents tax return?

What makes you think the other partner isn't a step-parent? See question 7 at http://www.irs.gov/newsroom/article/...245869,00.html.

[appelman]

Nice catch!

Very cute.

[superman]

Thanks

The other parent is not a step parent it is a same sex couple and just a registered RDP not legally married so the other parent has no legal rights.

Thanks for the help sometimes when the weird ones pop up it is nice to be able to bounce some thought off everyone here.

Have a great evening.

Superman

[Gary2]

The other parent is not a step parent it is a same sex couple and just a registered RDP not legally married so the other parent has no legal rights.

I still don't agree, and I just realized I didn't see the forest for the tree.

They're RDPs in CA. There's nothing in the original post to suggest that the community property rules don't apply. So their income is identical, to the extent it would be community income for married couples in CA. Unless there's income that would be considered separate income for a married couple, there's no real reason for wanting to shift the dependency.

But getting back to the parental rights, my reading of CA Family code 297, at 297.5(d), says that RDPs have the same rights with regard to their children as spouses. This implies to me that it creates a stepparent relationship.

Perhaps you're just working on the mistaken assumption that because the RDP isn't recognized as a relationship under Federal law, that it's irrelevant for federal purposes. That's a common misconception about DOMA. The IRS page linked in my previous post should make that clear.

[joanmcq]

I agree with Gary. The stepparent relationship is recognized. The wage income is split between the two federal returns, but is not considered earned income or wages by the parent that didn't actually earn it.

If one parent has $1 of separate income, that parent can be HOH, get the CTC, and dependency. Don't forget that the withholding is split too.

The CA return can be filed joint.

If you aren't comfortable with this return, send 'em to me. I've got probably about 80 same sex couples as clients by now, and getting more every day.

[Gary2]

I agree with Gary. The stepparent relationship is recognized. The wage income is split between the two federal returns, but is not considered earned income or wages by the parent that didn't actually earn it.

If one parent has $1 of separate income, that parent can be HOH, get the CTC, and dependency. Don't forget that the withholding is split too.

I'm not an expert in community property, but wouldn't it be a matter of separate expenses? If one partner puts more money into a retirement account, even if it's a Roth, wouldn't that work to effectively reduce their income available for HOH purposes (switching the HOH to the other partner)?

Is there any concept of putting their share of community income into separate accounts, and making it a point to have one person use their account for household expenses, while the other applies their account to non-household expenses (e.g. auto insurance, outside entertainment, etc.)? This works in a separate property state, if they really want to switch HOH to the lower income partner, but I can imagine that putting community income into separate accounts, absent other explicit agreements, would still have it considered community property.

If you aren't comfortable with this return, send 'em to me. I've got probably about 80 same sex couples as clients by now, and getting more every day.

Now this makes me jealous, and wanting to get community property established in MA to make the returns harder . I only have a scant handful. Most of my friends are DIY types. Being a flat-tax state, there's rarely an advantage to filing MFJ unless there's EIC or dependent care, so a DIY type doesn't even need to do a prototype federal MFJ.

[joanmcq]

Putting community income into a separate account doesn't change it's character. On an LGBT attorney board, there was talk about giftingfrom one partner to the partner that should be HOH (oftentimes it really doesn't matter, the community splitting makes the returns identical except for dependents, hoh, etc) an amount to put into a separate account, since gifts ARE separate income, and paying some household expenses with that income. Voila! one partner pays more than 50% of household expenses.

Yes, community property is a mangled mess. I spent quite a bit of time last night trying to explain to someone why I couldn't prepare & file just her return and the CA one when her partner already filed the federal using TurboTax.

And when a couple became 'registered' during 2011-what fun those allocations have been!

[superman]

Rdp

So are you saying when you are in a community property state that you have to file the federal returns as if they are mfs and split the deductions as if they were a man women couple filing mfs? Thanks for your help.

Superman

[Gary2]

So are you saying when you are in a community property state that you have to file the federal returns as if they are mfs and split the deductions as if they were a man women couple filing mfs? Thanks for your help.

If either one is domiciled in a community property state that recognizes their relationship, then the income that person receives that would be considered community income for an opposite sex married couple must be treated as community income.

They still file as single (or possibly HoH or even QW) on the federal return. So, for example, they're not subject to the MFS rule that says that if one person itemizes, the other has a 0 standard deduction.