Discussion:Does separation end marital community in CA?

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Discussion Forum Index --> Advanced Tax Questions --> Does separation end marital community in CA?


Discussion Forum Index --> Tax Questions --> Does separation end marital community in CA?

NWTaxPro (talk|edits) said:

22 February 2009
Client was separated from his spouse during the entire year of 2008. They finalized their divorce in July. He moved from CA to WA in May. The interesting thing is that, although they lived seperately, they continued to have a joint bank account until August (one month after their divorce)! Publication 504 states: “In some states, the marital community ends when the spouses permanently separate, even if there is no formal agreement. Check your state law.” Is CA one of those states? Source? I have used the yellow box!!

Taxea (talk|edits) said:

22 February 2009
CA state tax office. taxea

Joanmcq (talk|edits) said:

22 February 2009
Yes, CA is one of those states. Community ends when couple separates with no intent of reconciling. Source? I live in CA and got divorced. BTW, I still have a joint acct with my ex. we own rentals. But at no time during the marriage did we ever mingle funds except for the rentals!

Mscash (talk|edits) said:

22 February 2009
The "no intent of reconciling" part is important. Do anything resembling reconciling and the clock starts over.

Riley2 (talk|edits) said:

22 February 2009
The earned income of a California domicillary is his separate property if earned after the date of separation with the intent to end the marriage.

In your case, the husband established a Washington domicile in May. I believe that Washington law provides that income earned after the date of separation is separate property of the earning spouse if the spouses show by affirmative action their intent not to maintain the community status. Not sure that your clients meet this requirement since they maintained a joint account. See Rev Rul 68-66.

NWTaxPro (talk|edits) said:

24 February 2009
Thanks everyone for your input!

NWTaxPro (talk|edits) said:

26 February 2009
Riley2 - Do you by chance know the source for the statement: "The earned income of a California domicillary is his separate property if earned after the date of separation with the intent to end the marriage." I really appreciate your help on this and the Rev Rul was very helpful.

Riley2 (talk|edits) said:

26 February 2009
See California Family Code § 771(a) which provides that earnings and accumulations of a spouse, while living separate and apart from the other spouse, are the separate property of the spouse.

A long line of case law basically defines the term of “living separate and apart” as a separation with the subjective intent by at least one of the spouses to end the marriage. For example, see In re Marriage of Norviel, 102 Cal.App.4th 1152, 126 Cal.Rptr.2d 148, Cal.App. 6 Dist.,2002.

NWTaxPro (talk|edits) said:

27 February 2009
THANKS! You are a walking tax encyclopedia. Send me my bill.

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