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.
