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Reporting Community Property Income for CA RDP's


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#1 PandrewPanda

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Posted 21 January 2013 - 02:30 PM

In the past we've always filed 1099-Int and 1099-Div forms as nominees for each other, and a 1099-R for 1/2 of an annuity distribution. Are we still required to do so, under the new rules for RDP's in community income states, since we have to allocate community income on our federal returns now (although we have to file as "single" and separate returns)?

#2 Tax_Counsel

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Posted 21 January 2013 - 06:10 PM

From the information I have available, it appears that using the worksheet in Publication 555 and attaching copies of your partner’s Forms 1099 and W-2 to your return (in addition to everything needed on a regular return) should be sufficient, assuming you are in CA, NV, or WA. That will provide the IRS with the information to determine the income of each domestic partner and how that income has been allocated. Publication 555 has a lot of details on reporting community property income, and the IRS also has a separate internet page with FAQs for same sex marriages and RDPs in community property states that you may find useful.

#3 PandrewPanda

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Posted 22 January 2013 - 05:17 PM

Thank you for your help! I just found out that the IRS has a new Form 8958 that is not yet available but supposedly coming very soon, which will allow RDPs as well as Married Filing Separately to allocate community property income by category, and there is a place for the Social Security number of each RDP or spouse. So perhaps this will solve the problem. A draft of the form can be found online. What still puzzles me is whether one has to fill in ALL income or only Community Property Income. For instance, there are only 3 lines for interest income and it is supposed to be entered by payer - does that mean one has to repeat all the entries on Schedule B, or only those that are community income? Of course, one can "attach additional sheets" as necessary, but that would make it impossible to e-file. Any suggestions?




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