Community property designation

You can split income by community property rules by going to
Utilities
,
Filing status Optimization
, then
Community Prop / Filing Status / Other
tab and mark the
Split income according to Community Property rules
checkbox.
You can specify whether an activity or a source document is community property or non-community property. These designations are available for units entered on the following screens:
Screen
Folder
Notes
W2
Income
N/A
W2G
Income
N/A
C
Business
N/A
Rent
Rent & Royalty
Rent & Royalty units indicated as community property will be allocated 50/50 to the taxpayer and the spouse when two separate clients are created via the Filing Status Optimization utility with the Split income according to Community Property rules option enabled.
F
Farm
N/A
4835
Farm Rental
N/A
K1
K1 1065, 1120S
N/A
K1T
K1 1041
N/A
If the taxpayer is married, files a separate federal return, and resides in one of the following community property states - AZ, CA, ID, LA, NM, NV, TX, WA, or WI (or for registered domestic partners, files a single or head of household federal return, and resides in CA, NV or WA) - use the
Community property designation
field to identify whether or not the income/loss is generated from community property. By default, the application treats a blank entry as community property and an entry of
N
as non-community property (i.e. separate property).
note
  • This field is disabled if a community property state return is not attached or the taxpayer's primary residence indicated on the 1040 screen, located in the General folder, is not a community property state.
  • 1099-R income will not be split for community property states.
  • For New Hampshire returns, Form BT - Summary activities designated as Joint or blank are allocated 100% to the taxpayer. Only those specifically listed as spouse are assigned to the spouse. Also, for each applicable form or schedule, enter the 2-digit state postal code for the location of each business activity. The application uses this information to process apportionment Forms BET-80 and DP-80.
  • Any entry in this field will proforma to all subsequent years, if applicable.

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