janztax[at]aol.com (JanZtax) wrote:

- quote -

It's 62. The way they are defined in the law, domestic
partnerships are equivalent in (state) law in almost every
way to marriage. So I don't see any difference between them
and civil unions.

- quote -

Not all items related to taxation, just the treatment of
community property for income tax purposes. At least under
state law. Under federal law there will be differences both
for tax and non-tax purposes.

- quote -

Gay couples can't legally get married under state law,
unless a court determines that position is unconstitutional.
So the marriages are either not really legal (in which case
the right to become domestic partners remains) or they are
legal, in which case domestic partnership is unnecessary.

- quote -

They're single under federal law, so that's how they should
file.

Stu

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"MTW" <mtwingcpa[at]yahoo.com> wrote:
- quote -

is that the reason that joint returns were created is that
Congress wanted to equalize a system that allowed (or
required) couples in community property states to each claim
half their total income, as with a partnership, while
couples in other states could not.

This provision in the CA domestic partnership law appears to
prevent that kind of treatment of community property of
these partnerships.

- quote -

If it's not earned income, it's generally not (at least
under California law) community property, so it doesn't
affect anything.

Stu

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The original post contains a lot of misinformation. First of
all, CA, as a state does not currently recognize gay
marriage or civil unions. However, CA does recognize
domestic partnerships which can consist of same sex couples
or, for those over age 62 or 65 (can't remember which)
opposite sex couples. Beginning January 2005, domestic
partners in CA will have almost all the rights (and
corresponding responsibilities) as married couples with the
specific exception of items related to taxation. (There are
over 1000 sections of the law that are beneficial to married
couples but not currently to domestic partners).

Sodomy (I'm assuming this is the "crime" the poster is
referring to) is not a crime in CA (has not been since the
70's).

It is unclear at this point what effect there will be on
domestic partnership rights for those who were recently
married in San Francisco. (Marriage would seem to override
domestic partnerships and if the marriages turn out to be
illegal, those who got married may have lost their domestic
partnership rights).

Then there is the issue of filing status for next year's
returns: Those who got married presumably can't file as
single on their state returns. However, they can't file as
married on their federal returns.

Lots is yet to be figured out.

Jan Zobel, EA
Oakland, CA

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Stuart O. Bronstein <spamtrap[at]lexregia.com> wrote:

- quote -

I haven't studied this, but I'd ~guess~ that CA has decided
not to treat earned income in this case as "community"
because the feds would not consider it so as the result of
the DOMA. So, CA is "conforming" to the feds on this issue.
<g
As to NON earned income, I suppose that STATE law would
prevail (joint, community, whatever).

MTW

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- quote -

They recognize the relationship for tax purposes. And they
give domestic partners (at least starting January 1, 2005)
community property.

But they will not recognize community property of domestic
partners for state income tax purposes.

Stu

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- quote -

Since married-joint is (for state purposes, will be very
soon for federal purposes) twice the single rate, I don't
see the issue. Each person would still have their standard
deduction of the single rate (if applicable) to offset the
"community" income reported from the
non-federally-recognized marriage that flows through from
1065 K-1.

- quote -

I'm aware that it used to. It also has certain "crimes" in
the law that can be committed ONLY by males. However, when
for state employees, the state started recognizing these
relationships, it was obvious that some of these older laws
had been superseded by newer ones. I will agree that the
language used for the "same sex" relationship is "registered
domestic partners" - and even occurs on page 4 of the form
540 instructions.... It might not say "marriage," but it
does recognize the relationship even for state income tax
purposes.

- quote -

Are we hypothetically saying that the states' computers know
more about us than we do? :-)

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"Phoebe Roberts, EA" <Phoebe[at]cottagesoft.com> wrote:
- quote -

How about schedule K's?

- quote -

It does that with respect to "marriage." But on January 1
California will have an enhanced "domestic partner" statute,
that gives gay couples nearly all rights that straight
married couples have. That includes community property and
rights to inherit.

The one thing that disturbs me about that statute is one
provision that says, "Earned income may not be treated as
community property for state income tax purposes."

My understanding is that at least one of the reasons there
are joint tax returns in the first place is that Congress
wanted to level the playing field between community property
states (in which each spouse is determined to have earned
half of all marriage income) and non-community property
states.

With that provision in California, I'm a little confused
about what it may mean, but I'm not at all optimistic. If
adjusted gross income on the state tax return is necessarily
based on what is on the federal return, then it appears that
community property for domestic partners cannot be divided
for even federal tax purposes.

Stu

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D. Stussy wrote:

- quote -

Um, other than because people will do just about any stupid
thing with their taxes, ... It's not like a 1065 would let
you take a higher standard deduction or avoid income-based
phaseouts that are lower for a single person or use the MFJ
brackets.

- quote -

Oh, it's how state law treats same-sex couples that you
think we could just move to California and get married. Bet
you didn't know that California is one of 38 states that
explicitly defines marriage as being only between one man
and one woman.

[To our esteemed Moderator: I know this is getting a little
far afield, and has the potential to deteriorate, but try as
I might, I just can't *not* add the next bit. If you feel
obligated to snip it (or the prior) for civility's sake, I
will understand.]

Imagine that you meet someone, start dating, and fall in
love. You have similar values, goals and beliefs, want to
spend the rest of your lives together, and decide to get
married. You have the blessing of both of your families and
your minister, so you go to City Hall to get a marriage
license. The clerk there tells you that the government's
computer system has determined that if you get married to
one another, it will undermine and degrade the centuries-old
institution of marriage.

This isn't discrimination, the clerk explains, because you
can marry anyone you want, as long as the computer system
approves - they'll even give you a handout so you can tell
at the beginning of a relationship whether you'll get
approval. While you're standing there trying to make sense
of things, two drunken teenagers come in and explain their
friends dared them to get married, and since they can always
get divorced if it doesn't work, they took the dare. The
computer approves them. Now there's a system that values
commitment, stability, and societal cohesion.

Phoebe

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Phoebe Roberts, EA wrote:
- quote -

Watch out: For one of these non-federally-recognized same
sex "unions" (for lack of a better term), it wouldn't
surprise me if we start seeing 1065's for these
"partnerships." :-)

Putting a W-2's wages onto a 1065 will be interesting,
especially in a COMMUNITY PROPERTY state such as CA which
also recognizes "gay marriage."

I wonder if anyone has tried that yet.

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Nan Eklund wrote:

- quote -

Well, how about this. Say to your clients, "There's a
stupid federal law that says even if you're married for
state purposes, you aren't married for federal purposes.
That law may or may not be Constitutional; no one knows yet.
Even if you were audited, the IRS isn't going to complain
if you file 2 single returns; they might complain if you
file MFJ. But if you feel strongly about filing MFJ, we can
do that. How would you like to file?"

I know what you mean, though. Every year, it seems like we
have at least one client who comes in with a divorce decree
filed in late December (unknown when the judge signed it)
that says "must file joint tax returns," and they want us to
decide if they were married or not. :P

- quote -

MFJ will always be worse than one Single and one HOH.
Assuming approximately equal (relatively high) incomes, it
should be about the same as 2 Single, at least in 2004.

Phoebe

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YOU have your priorities in order and know what you're
doing. I'm just not happy about MY being the one to decide
yea or nay for my clients and hoping I won't have to.

But pointing out that MFJ may cost money may let me weasel out?

Nan, EA in LA

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Nan Eklund wrote:

- quote -

FWIW, if we make it up to Massachusetts to get married, the
tentative plan is to file a single and a HOH, then either a
protective amended return requesting a refund (so when the
ruling goes in our favor, the statute won't have run on
getting the money back) or an amended return showing a
balance due with a deposit (rather than a payment) (so when
the ruling goes against us, the statute won't have run on
getting the money back). But in our case, state law isn't
on our side; I'm not sure what we'd do if we actually lived
in Mass.

Then again, since it looks like MFJ will cost us about
$1,400, we may not.

Phoebe

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naneklund[at]aol.com (Nan Eklund) wrote:

- quote -

If they have the money, go for a private letter ruling. But
they'd have to live with the ruling if it goes against them.

Stu

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In general it's NOMB.....I just want a specific ruling
before next tax season so it isn't ME who has to decide that
they can or can't file married joint. I'd hate to have to
disappoint some of my nicest clients. Or lose one of the
fees.

Either way, I'd be sad.

Nan, EA in LA

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Harlan Lunsford wrote:

- quote -

AFAIK, there aren't any same-sex anti-cohabitation laws
(except in Texas, and that only counts if there are 5 of
you, last I heard). Those situations were all covered by
the sodomy statutes, which have since been deemed
unconstitutional.

Phoebe

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Harlan Lunsford wrote:

- quote -

1) If the dependent passes the dependency tests, why should
anyone care about the intrigues of the relationship.

2) My policy on the acts between consenting adults where
the acts are neither physically violent nor emotionally
abusive AND do not involved narcotics is: I don't care
what you do as long as you don't do it in front of my
children.

At one of many Republican fundraisers I attended, some
people began discussing that a certain individual was gay.
My contribution was "Does he vote Republican? <G> "

Within the last five years, I was at a PTA meeting where
the subject of a teacher being ~suspected~ of being gay
came up. I asked "Is she an effective teacher? <G> "

Fortunately the Internal Revenue Code is blind on this
issue.

Dick

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- quote -

True. But OP asked about his adult son, and not about one
of "those" types of relationships.

Like for example one of my female clients who claims her
female "cousin". Ifyougetmydrift.

Cheer$$$$$,
Harlan Lunsford, EA n LA

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William Brenner wrote:
- quote -

I know the feeling AND can empathize. So many times I want
to tell a client he can't do this or that, but unfornately
he can.

How many times do we secretly smile when IRS disallows a
deduction? Or when we get a chance to advise a client not
to claim something because we KNOW he has no documentation
even thought we KNOW he actually paid the item sort of to
even up the score from am past unwise deduction? (follow me
there?)

It's crunch time, y'all!

Cheer$$$$,
Harlan Lunsford, EA n LA

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- quote -

I believe it does something along the lines of - can't be in
violation of local laws - many states/cities still have laws
agains co-habitation, etc.

--
Regards,

Mark Rigotti

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wjbjr[at]webtv.net (William Brenner) wrote:

- quote -

Are you saying it's immoral to not want to sign up to be
legally liable for an adult child's debt? Or is it only
immoral if you're supporting the child? Should they refuse
to support their child at all because they would be unable
to pay any large debts he might incur?

Maybe I should stop deducting my donations to charities
because I'm not keen to hand over my entire savings. I'm
too morally diseased to deserve tax breaks.

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