Is Filing Separate Tax Returns Necessary with Income from Separate Property
My question involves a marriage in the state of: California
Income that will be reported on next year's tax filings also can complicate community property issues, so a join tax return or two married filing separately might need to be considered. An example would be stock in a company being sold which has a tax liability.
"Separate property can be transmuted into community property not only by agreement but by actions too. Seemingly innocuous acts, like one person making a mortgage payment on their spouse's separate residence, can have an impact."
Does filing cause an issue?
Re: Is Filing Separate Tax Returns Necessary with Income from Separate Property
Speaking broadly, filing as married will not affect whether or not property is separate or community property; but you should discuss the details with your attorney.
Re: Is Filing Separate Tax Returns Necessary with Income from Separate Property
Filing as married itself would not. But paying a tax with community funds may result in problems with conversion (at least in part) of an asset to community property. I would certainly NOT ask a tax preparer about community property law. That is not an area that a tax preparer would necessarily have any knowledge and the preparer giving advice on that may violate the law against unauthorized practice of law. That would be a question best asked of a family law attorney.
Re: Is Filing Separate Tax Returns Necessary with Income from Separate Property
Assume paying the separate property tax liability from the separate property funds.