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Form 8958, Allocation of Tax Amounts in CP States

My client is filing MFS and is a Texas resident.  There is a pre-nup specifying that all property is separate property, there is no community property.

 On the new Form 8958, Proseries has a question, "Important, are allocated community property amounts reported on this return?"  I answered no.  End of story.  No errors. No Form 8958 printing.  Too good to be true?? (This is actually my preferred answer, but between the IRS and ProSeries, I'm used to things being difficult.)  If it matters, this taxpayer is paper filing.

Neither the form 8958 instructions, nor publication 555, Community Property are helpful.

Has anyone else filed MFS in a Community Property state and NOT filed Form 8958?  I just want to avoid any IRS correspondence on this return.


    Can I raise my hand? I have seen community property splits forced in an audit.  I have never understod it since MFJ or the split almost always benefits the taxpayers.  Sometimes one more than the other, but hopefully they have been able to work out something between them.

    •  In those audits, did the taxpayers have pre-nup agreements or separate property agreements?  My taxpayers are happily married, just keeping their property separate.  My understanding is that the agreements override the state's community property laws. I've had a couple that divorced and it was painful getting both spouses to understand the allocation of the community income.
    • Actually both audits were just before I did the returns.  I got the fallout.  I do not believe either couple had any kind of agreement or prenup.  They were audited and told they had to do a split (at least until they split!). There was even an audit of his return on the last day of the three year limit--no change audit. The other was many years ago and the wife received a portion of ex-spouse's military pension.  She remarried and they were told that they always had to file separately because the pension was not community income so we did a split on all other income excluding the pension.  Both Texas by the way. I have several others who did not care to comingle and filed separately for years with no problems.  Sometime in a quieter time we can exchange email addresses and I'll tell you the one that was audited with an extremely unusual ending or should I say comment by the head of the IRS office.  It is nothing like your problem--just very interesting and educational.
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