Spouse A has an investment account as does Spouse B. These accounts existed before their marriage. If they never add new or outside money to the accounts I assume these accounts produce no income that is community property for income tax purposes even if there is more money in the accounts do to growth. If new money is added I assume a proportion is made between new and old principal (pre marriage) to determine the community property income. Please correct me or tell me I am right on.
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how about a solid
maybe?
Page 5 of Pub 555 (http://www.irs.gov/pub/irs-pdf/p555.pdf) states that "income from separate property is separate income".
However, on page 2 of this article, http://www.nolo.com/article.cfm/pg/2...0/309/298/ART/
the author points out that separate property can be "lost" [my terminology]:
Example - A checking account owned by you and your spouse, into which you put a $5,000 inheritance 20 years ago,
Becomes - Community Property,
Why? - The $5,000 (which was your separate property) has become so mixed with community property funds that it has become community property
Moral of the story? Do NOT commingle separate/community property. As the author of the last article above points out, you can both sign an agreement to change separate to community or community to separate, and such an agreement "trumps" other interpretations.
Hope this helped.Just because I look dumb does not mean I am not. -
In CA, income from separate property is separate, not community property. Like travis said, don't commingle and you are fine. In states with 'french' community property laws, income from separate property is community property, but not in 'spanish law' states like CA.Comment
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