Tax Consequences of CA same sex marriage

[erchess]

I just heard on the news that unlike Mass, CA is allowing couples from other states to wed. My question is how much of a fuss will the Federal Government and other states like NC and SC put up before allowing these couples to file joint returns? (I realize that I am asking members to make forward looking statements which inherently involve risk and uncertainty.) My concern is that until the matter has been tested in the courts I may need to advise affected couples NOT to file jointly unless they are prepared for the legal expenses of a fight all the way to the US Supreme Court.

Please note that this is not the place to discuss our opinions of whether same sex couples should be allowed to marry. I don't guess anyone has to take on a client they don't want to take on but I personally do not let my opinion of someone's lifestyle interfere with my doing their return as long as I believe they are telling me the truth about their lives and want me to file in the manner that is to their best legal advantage.

[JohnH]

My answer to anyone in this situation would be that I'm not a trail blazer and have no interest in being involved in settling either side of issues like this. How they conduct their private lives is entirely their business, but when they walk into my office I'm preparing the return based on the current law, whatever it is. If they're looking for a crusader or help in advancing a cause, they need someone more adventuresome preparing their return.

[DTS]

Same-sex

My answer to anyone in this situation would be that I'm not a trail blazer and have no interest in being involved in settling either side of issues like this. How they conduct their private lives is entirely their business, but when they walk into my office I'm preparing the return based on the current law, whatever it is. If they're looking for a crusader or help in advancing a cause, they need someone more adventuresome preparing their return.

Ditto...

What I'm waiting for are the courts to be jammed with divorce cases that involve alimony and child support. I have several gay and lesbian friends and many, not all, change partners like they change their underwear. After a divorce ruling to have a spouse/domestic partner pay the alimony or c/s, the idea of marriage may be a moot issue for many.

They are gathering signatures to put on the ballot in November to challenge this. So, a "wait and see" here in CA.

Dennis

[erchess]

What, exactly,

would a preparer risk by preparing such a return? My concern was for the potential client rather than for myself. I think I understand what the client could be risking.

[DTS]

what would a preparer risk by preparing such a return?

The last time I looked, you can't prepare a joint 1040 for unmarried couples, gay or straight. How would you do this? Are you talking about filing separate 1040s and a joint state return for a gay or lesbian couple?

Dennis

[S T]

California Domestic Partner

Effective 2007, In California the domestic partners can file a "Declaration of Domestic Partnership" with the Secretary of State, and would be required to file a married joint or married filing separate return State return.

If the domestic partners do not register they are not required to file a married joint or married separate return in California.

http://www.ftb.ca.gov/individuals/faq/dompart.shtml

Sandy

[DaveO]

Gay and Lesbian Clients

Pose their own set of challenges. I have always but the question of government recognition of same sex unions in the "be careful what you wish for" catagory. Why we invite government into the most intimate of relationships is beyond me.

There are many tools to afford same sex couples most of the benefits of marriage. Tools that won't break the bank when they decide to move along on their seperate paths. Like many of these issues the view changes dramatically with your perspective.

[New York Enrolled Agent]

I just heard on the news that unlike Mass, CA is allowing couples from other states to wed. My question is how much of a fuss will the Federal Government and other states like NC and SC put up before allowing these couples to file joint returns? (I realize that I am asking members to make forward looking statements which inherently involve risk and uncertainty.) My concern is that until the matter has been tested in the courts I may need to advise affected couples NOT to file jointly unless they are prepared for the legal expenses of a fight all the way to the US Supreme Court.

The Defense of Marriage Act (H.R. 3396 - 104th Congress) expressly would not allow MFJ for federal tax purposes (individual states may do otherwise).

SEC. 3. DEFINITION OF MARRIAGE.

(a) IN GENERAL- Chapter 1 of title 1, United States Code, is amended by adding at the end the following:

`Sec. 7. Definition of `marriage' and `spouse'

`In determining the meaning of any Act of Congress, or of any ruling, regulation, or interpretation of the various administrative bureaus and agencies of the United States, the word `marriage' means only a legal union between one man and one woman as husband and wife, and the word `spouse' refers only to a person of the opposite sex who is a husband or a wife.'.

[ED SMITH]

There is an old saying - "As California goes, so goes the nation". I hope not.

This may not be permanent in CA as there is going to be a measure on November's ballot to amend the constitution to define marriage in the traditional way.

[erchess]

Thank you NYEA

I had forgotten all about the Defense of Marriage Act. I was making two assumptions. I was assuming that marriage was still completely a state matter. The DMA casts doubt on that but does anyone know if the US Supreme Court has heard a challenge to its Constitutionality? The other assumption I was making was that there is a Constitutional Requirement that if one state says that a couple is married then all other states have to recognize them as married.

To answer someone's question I was inquiring whether it would be safe for me to prepare Federal and NC or SC MFJ returns for gay couples who alleged to me that they had been married in California even if they had gone there only for the purpose of getting married or who told me that they had been residents of Mass and while there gotten married and now moved into my area. I started the thread because having forgotten about DMA I could see no danger to me in such a course of action. With DMA in mind I can see more than enough reason to leave Federal MFJ to others for now. I would also guess that NC and SC will likely pass laws to give me similar pause about the State returns.

[OtisMozzetti]

OtisMozzetti

It is not for me to pass judgement on the federal tax laws, nor on the California tax laws, but here in California where the Registered Domestic Partners have already been a reality all I can think is that those whose returns get complicated due to multiple filing statuses will have to expect high fees for the complexity and time involved with the tax preparation.

[Kram BergGold]

NO to joint except Ma and Ca

A married gay couple can only file joint if they are residents of CA or MA. The US and the other 48 states do not recognize gay marriages as legal.

[DTS]

Fees

...but here in California where the Registered Domestic Partners have already been a reality all I can think is that those whose returns get complicated due to multiple filing statuses will have to expect high fees for the complexity and time involved with the tax preparation.

Actually, I thought this would be an issue for me coming into this past season, but as it turned out, it was not. I did not have to prepare one return like this, but I was somewhat prepared for it.

Dennis

[JohnH]

In some parts of NC & SC, it will be a long time before the gay marriage issue is settled. They're still tryiing to figure out the answer to the question "If I marry my first cousin, does my father also automatically become my uncle-in-law?"

[Lion]

Civil Union

CT has civil unions. So, a couple who is united by a CT civil union is, of course, not married for federal tax purposes; but MUST file as married filing jointly/civil union filing jointly or MFS/CUFS on their CT resident return. Well, there's HH and QW as well as S, but you get the idea. CT does NOT recognize a marriage from another state that is not recognized for federal tax purposes. Only CT civil unions. We could end of with 50 sets of rules, plus federal, and Puerto Rico, and American Samoa...