Form 8958 (Rev. 11-2014)
Page 3
General Instructions
Future developments. For the latest information about developments
related to Form 8958 and its instructions, such as legislation enacted
after they were published, go to www.irs.gov/form8958.
Purpose of Form
Use Form 8958 to determine the allocation of tax amounts between
married filing separate spouses or registered domestic partners (RDPs)
with community property rights. If you need more room, attach a
statement listing the source of the item and the total plus the allocated
amounts. Be sure to put your name and social security number (SSN) on
the statements and attach them at the end of your return.
Community property laws affect how you figure your income on your
federal income tax return if you are married, live in a community
property state or country, and file separate returns.
This form is used for married spouses in community property states
who choose to file married filing separately. This form is also for RDPs
who are domiciled in Nevada, Washington, or California. For 2010 and
following years, a RDP in Nevada, Washington, or California generally
must follow state community property laws and report half the
combined community income of the individual and his or her RDP.
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CAUTION
RDPs are not married for federal tax purposes. They can
only use the single filing status, or if they qualify, the head of
household filing status.
Community or Separate Income
In a community property state, if you file a federal tax return separately from
your spouse, you must report half of all community income and all of your
separate income. Likewise, a RDP must report half of all community income
and all of his or her separate income on his or her federal tax return.
Generally, the laws of the state in which you are domiciled govern whether
you have community income or separate income for federal tax purposes.
Generally, community income is income from:
• Community property.
• Salaries, wages, or pay for services of you, your spouse or RDP, or
both during your marriage or registered domestic partnership.
• Real estate that is treated as community property under the laws of
the state where the property is located.
Generally, income from separate property is the separate income of
the spouse or RDP who owns the property.
For more information, see Pub. 555, Community Property.
Identifying Income and Deductions
You and your spouse or RDP must be able to identify your community
and separate income, deductions, credits, and other return amounts
according to the laws of your state.
Income
The following is a discussion of the general effect of community property
laws on the federal income tax treatment of certain items of income.
Wages and self-employment income from sole proprietorship. A
spouse's or RDP's wages and self-employment income from a sole
proprietorship are community income and must be evenly split.
TIP
For RDPs, the self-employment income from a sole
proprietorship is also split for self-employment tax purposes.
See Self-employment tax, later.
Interest, dividends, and rents. Interest, dividends, and rents from
community property are community income and must be evenly split.
Gains and losses. Gains and losses are classified as community or
separate depending on how the property is held.
Withdrawals from individual retirement arrangements (IRAs). There
are several kinds of individual retirement arrangements (IRAs).
Distributions of IRAs by law are deemed to be separate property, even if
the funds in the account would otherwise be community property.
These distributions are wholly taxable to the spouse or RDP whose
name is on the account. That spouse or RDP is also liable for any
penalties and additional taxes on the distributions.
Pensions. Generally, distributions from pensions will be characterized
as community or separate income depending on the respective periods
of participation in the pension while married (or during the registered
domestic partnership) and domiciled in a community property state or in
a noncommunity property state during the total period of participation in
the pension. These rules may vary between states.
Partnership income. If an interest is held in a partnership, and income from
the partnership is attributable to the efforts of either spouse or RDP, the
partnership income is community property.
TIP
For RDPs, the self-employment income from a partnership is
also split for self-employment tax purposes. See Self-
employment tax, later.
Tax-exempt income. For spouses, community income exempt from
federal tax generally keeps its exempt status for both spouses. For
example, under certain circumstances, income earned outside the United
States is tax exempt. If you earned income and met the conditions that
made it exempt, the income is also exempt for your spouse even though
he or she may not have met the conditions. RDPs should consult the
particular exclusion provision to see if the exempt status applies to both.
Income from separate property. In some states, income from separate
property is separate income. Other states characterize income from
separate property as community income.
For more information, see Pub. 555. For specific information that
pertains to your situation, check with the laws of your state.
Deductions
If you file separate returns, your deductions generally depend on
whether the expenses involve community or separate income.
Business and investment expenses. If you file separate returns,
expenses incurred to earn or produce community business or
investment income are generally divided equally between you and your
spouse or RDP. Each of you is entitled to deduct one-half of the
expenses on your separate returns. Separate business or investment
income are deductible by the spouse or RDP who earns the income.
Other limits may also apply to business and investment expenses. For
more information, see Pub. 535, Business Expenses, Pub. 550,
Investment Income and Expenses, and Pub. 555.
IRA deduction. Deductions for IRA contributions cannot be split
between spouses or RDPs. The deduction for each spouse or RDP is
figured separately and without regard to community property laws.
Personal expenses. Expenses that are paid out of separate funds, such
as medical expenses, are deductible by the spouse or RDP who pays
for them. If these expenses are paid from community funds, divide the
deduction equally between you and your spouse or RDP.
Deductible portion of self-employment tax. The deductible portion of
the self-employment tax is split only when the self-employment tax is
split by the spouses or RDPs. See Self-employment tax, later.
Credits, Taxes, and Payments
Self-employment tax. Although the self-employment tax rules contain a
provision that overrides community income treatment in the case of
spouses (IRC 1402(a)(5)), this provision does not apply to RDPs. RDPs
split self-employment income from sole proprietorships and
partnerships for self-employment tax purposes.
The following rules apply only to persons married for federal tax
purposes.
Sole proprietorship. With regard to net income from a trade or
business (other than a partnership) that is community income, self-
employment tax is imposed on the spouse carrying on the trade or
business.
Partnerships. All of the distributive share of a married partner's
income or loss from a partnership trade or business is attributable to the
partner for computing any self-employment tax, even if a portion of the
partner's distributive share of income or loss is community income or
