Filing Status Optimization and Community Property Allocation

The Filing Status Optimization (FSO) utility includes the option to split income based on community property state rules. This function enables you to automatically apply state community property rules to Married Filing Separate (MFS) and Registered Domestic Partner (RDP) returns filed for individuals living in a community property state.
To access this feature, choose
Utilities
, then
Filing Status Optimization
, and select the
Community Property and Other
tab.
note
  • This option is only enabled when the attached state return, or state postal code indicated on the 1040, is AZ, CA, ID, LA, NM, NV, TX, WA or WI screens.
  • The following screens in UltraTax CS can be identified as community property: W2 (Wages), W2G (Gambling Winnings), C (Profit or Loss From Business), F (Farm), Rent (Rent and Royalty Property), 4835 (Farm Rental), and K-1 (Schedule K-1, 1065/1120S). Use the Community property designation fields on these screens to identify which items are community property.
  • UltraTax CS screens not mentioned in the previous list will split items based on the respective
    T,S,J
    fields or the Taxpayer and Spouse columns where provided. If you leave the
    T,S,J
    fields blank, UltraTax CS allocates the amount to the taxpayer.
  • After the community property items are identified and the separate clients are created via the utility, UltraTax CS will automatically complete the
    ComPSt
    screen in the General folder using the spouse's (or domestic partner's) tax information. UltraTax CS uses information from this screen, combined with calculated tax return information for the taxpayer, to complete the Community Property State Allocation Worksheet.

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