# How to Calculate Active Appreciation when Trading Stock with Separate Property Funds

1. Junior Member
Join Date
Dec 2017
Posts
4

## How to Calculate Active Appreciation when Trading Stock with Separate Property Funds

My question involves a marriage in the state of: California

I own stock from a company acquired prior to marriage. No pre-nup. Considering selling my stock now and looking to buy other stocks and possibly day trade them.

I understand the definitions of active and passive appreciation, but as it relates to stocks it seems to be grey and open to interpretation. Where "market forces" determine if active or passive. I guess my question is at what point is it "market forces"? Generally it's always market forces. If I buy and hold for a year does that make it passive appreciation? What if I trade 100 times (buy stock and sell stock) a year does the appreciation remain passive? Is it 50 times per year? Or 10?

2. Senior Member
Join Date
Oct 2006
Posts
15,893

## Re: How to Calculate Active Appreciation when Trading Stock with Separate Property Fu

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3. Senior Member
Join Date
Sep 2010
Posts
19,378

## Re: How to Calculate Active Appreciation when Trading Stock with Separate Property Fu

You've got two issues here.

First, how long you hold it has squat to do with anything. If the original investment is separate property and you don't do anything to it as part of your married estate (that the appreciation is due only to market pressures), then the appreciation is passive and also seperate property. If you bought GOOGLE at \$500 before you were married and sell now at \$1000, that is all your separate property (of course there's capital gains to consider). If you had stock in a company you worked for while married, that would possibly be a different story.

Now once you sell the asset, you have to be very careful what you do with the proceeds. If you do any comingling of those proceeds with your marital funds, they now become marital property. If you intend to buy and sell things that started as seperate assets and wish them to remain so, you need to keep those isolated.

4. Junior Member
Join Date
Dec 2017
Posts
4

## Re: How to Calculate Active Appreciation when Trading Stock with Separate Property Fu

Quoting flyingron
You've got two issues here.

First, how long you hold it has squat to do with anything. If the original investment is separate property and you don't do anything to it as part of your married estate (that the appreciation is due only to market pressures), then the appreciation is passive and also seperate property. If you bought GOOGLE at \$500 before you were married and sell now at \$1000, that is all your separate property (of course there's capital gains to consider). If you had stock in a company you worked for while married, that would possibly be a different story.

Now once you sell the asset, you have to be very careful what you do with the proceeds. If you do any comingling of those proceeds with your marital funds, they now become marital property. If you intend to buy and sell things that started as seperate assets and wish them to remain so, you need to keep those isolated.