WSJ: Gay Couples Get Equal Tax Treatment

A recent Wall Street Journal article reports on an IRS ruling requiring same-sex couples to be treated the same as heterosexual couples under California tax law. Pursuant to California community property law, registered domestic partner as well as married individuals filling separate tax returns must combine their income and then each much report half of the combined sum for tax purposes. Applying this rule for federal tax purposes often would result in lower overall tax liability for domestic partners. However, in a 2005 memorandum, the IRS stated that California domestic partners should not apply the community property standard to federal taxes. According to a new IRS ruling, the IRS has reversed that  decision and now requires domestic partners in California to combine and then divide their income for federal tax purposes.


Posted by Wesley J. Bailey, Associate Editor, Wealth Strategies Journal.