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Married Filing Separately: compute Marcella's income only

Frasier and Marcella, husband and wife, file separate returns. Frasier and Marcella live in a community property state that considers separate property income to be separate. Frasier's salary is $32,000 and Marcella's salary is $35,000. Marcella receives dividend income of $4,000 from stock inherited from her parents. Frasier receives interest income of $5,000 from bonds purchased with his salary after marriage. Frasier and Marcella receive $10,000 dividend income from stock they purchased jointly. Marcella's income would be

a. $45,000.

b. $44,000.

c. $42,500.

d. $41,500.

Solution Preview

The concept of community property in the nine states that endorse the idea are each a little different. Separate property is different from community property and many states define separate property as that which was brought to the marriage, or received by gift, bequest or device during the ...

Solution Summary

The 180-word cited solution provides some discussion about community property state rules including the variances. It also states a tax rule used to make certain determinations of ownership of assets.