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Switch to Forum Live View California, Taxes, and SSMCs
7 years ago  ::  Apr 15, 2009 - 3:53AM #1
Posts: 14,591

Wow, who said same-sex marriage was a bed of roses?!

California now has an entire instruction booklet (16 pages) related to income taxes and same-sex married couples.  It's FTB Pub 776, Tax Information for Same-Sex Married Couples

I'm assuming anyone who needs this information already has it.  I came across it in the instruction booklet for the basic California income tax forms (540 and 540A) and found it quite interesting, so I thought I'd mention it here.

The entire SSMC booklet has "collector's item" written all over it :-)  Even if the court overturns Prop 8, the booklet is still the first of its kind in California ... and hopefully the first of a long string of such booklets year after year after year.  So it's already a piece of history in the making.

I've skimmed it but haven't read it all the way through.  For one thing, as far as the California Franchise Tax Board is concerned, a same-sex married couple is now known (in typical tax-type jargon) as an SSMC.  For another thing, the booklet addresses differences between California income tax requirements and filing status and federal income tax requirements and filing status.  It touches on a lot of areas, including: 

* Division of community property (California is a community property state)
Capital losses
Transactions between same-sex married individuals
Sale of residence
Dependent care assistance
Investment interest
Qualified residence acquisition loan & equity loan interest
Expense depreciation property limitations
Education loan interest
Rental real estate passive loss
Rollover of publicly traded securities gains into specialized small business investment companies

There's a special California SSMC Adjustments Worksheet for figuring a lot of this stuff out.

I'm thinking these kinds of tax complications, instructions, and considerations will be part of life from now on in any state where same-sex marriage is legal.  Of course, it's extra-complicated in California this year because of Prop 8, which put the kibosh on same-sex marriages.  Prop 8 is silent on retroactivity, and the state Supremes are still reviewing Prop 8.


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