Question 1

Most states are community property states.

Accepted Answer

Only nine states in the U.S. are considered community property states, where property acquired during the marriage is considered jointly owned by both spouses. The majority of states follow equitable distribution rules.

Question 2

Which one of the following conditions must be satisfied in order for a married taxpayer to be taxed on only his income if he resides in a community property state?

Accepted Answer

The answer of Which one of the following conditions must...

Question 3

Patricia and Cliff are married but file separate tax returns. Patricia received a salary of $42,000 and Cliff received $15,000 of dividends from a stock portfolio that is his own separate property.
a.If Patricia and Cliff live in a common law state, what income should Patricia show on her separate return?
Salary
Dividends
b.If they live in California (a community property state), what income should Patricia show on her separate return?
Salary
Dividends

Accepted Answer

The answer of Patricia and Cliff are married but file...

Question 4

Molly and Steve are married and live in Texas. Molly earns a salary of $50,000 and Steve owns a rental property that gives him $35,000 of income. If they filed separate tax returns, what amount of income would Steve report?

Accepted Answer

The answer of Molly and Steve are married and live...

Question 5

Rachel and Rob are married and living together in California. Their income is:
a.If Rachel files a separate return, how much income should she report?
b.If Rob and Rachel live in Texas, what should Rachel report as income?

Accepted Answer

The answer of Rachel and Rob are married and living...

Question 6

Which of the following is not a true statement regarding community property law?

Accepted Answer

Colorado, Ohio, and Florida are not community property states.

Question 7

Lee and Pat are married taxpayers living in Louisiana. Lee earns wages of $40,000 and has $5,000 of dividend income from separate property. Lee and Pat have interest income from community property of $10,000. If Lee and Pat file separate income tax returns, what amount of income must be included on Lee's separate tax return?

Accepted Answer

Louisiana is a community property state where income earned during marriage is community property income. Lee's wages of $40,000 are community property income, as are the interest income from the community property of $10,000. Therefore, Lee's total community property income is $50,000 ($40,000 + $10,000). The dividend income from separate property is not subject to community property rules and is not included in Lee's community property income. However, since Louisiana is a community property state, Lee must include half of the community property income on his separate tax return, which is $27,500 ($50,000 divided by 2). Therefore, the correct answer is C.

Quiz 6: Credits and Special Taxes

Most states are community property states.

Which one of the following conditions must be satisfied in order for a married taxpayer to be taxed on only his income if he resides in a community property state?

Molly and Steve are married and live in Texas. Molly earns a salary of $50,000 and Steve owns a rental property that gives him $35,000 of income. If they filed separate tax returns, what amount of income would Steve report?

Rachel and Rob are married and living together in California. Their income is: a.If Rachel files a separate return, how much income should she report? b.If Rob and Rachel live in Texas, what should Rachel report as income?

Which of the following is not a true statement regarding community property law?