Planning to move to Texas but rental income is from California

[gr3802]

What is the name of your state? Texas

I have friends live in Texas and I would like to move there in the near future.

I heard that Rental income in Texas is treated as community property for married couple.
My question is that if my rental is in California, will its rental income be treated based on California law? Which it should be separate income.

Thanks!

-G

 

[LdiJ]

What is the name of your state? Texas

I have friends live in Texas and I would like to move there in the near future.

I heard that Rental income in Texas is treated as community property for married couple.
My question is that if my rental is in California, will its rental income be treated based on California law? Which it should be separate income.

Thanks!

-G

Both TX and CA are community property states...therefore the income would be treated the same either way. It is separate property only if no community property is used to maintain or pay for expenses of the rental property. Otherwise, only the net profit could be claimed as community property and only what accrued during the marriage.

 

[Just Blue]

What is the name of your state? Texas

I have friends live in Texas and I would like to move there in the near future.

I heard that Rental income in Texas is treated as community property for married couple.
My question is that if my rental is in California, will its rental income be treated based on California law? Which it should be separate income.

Thanks!

-G

Are you actually married or is this in regards to the GF from your other thread?

 

[gr3802]

Both TX and CA are community property states...therefore the income would be treated the same either way. It is separate property only if no community property is used to maintain or pay for expenses of the rental property. Otherwise, only the net profit could be claimed as community property and only what accrued during the marriage.

Thanks for your reply. I believe in CA, the rental income from separate property will be separate income while in Texas, it is not. I'm not sure if Texas law does not care where the property's located matter or not. Since I will be filing California State tax return on income that is originated by property located in California, does Texas law treat that as Community income?

 

[LdiJ]

Thanks for your reply. I believe in CA, the rental income from separate property will be separate income while in Texas, it is not. I'm not sure if Texas law does not care where the property's located matter or not. Since I will be filing California State tax return on income that is originated by property located in California, does Texas law treat that as Community income?

I believe that you are wrong. The property is going to be treated the same way in both state because both states are community property states. What matters is whether or not community property is used to maintain the property.

 

[gr3802]

Are you actually married or is this in regards to the GF from your other thread?

Are you actually married or is this in regards to the GF from your other thread?

Nope, I'm not married. Each state has different law, so I would like to know all the details before getting married. I can sell my current home and move to Texas and buy a different one there. But if it is better to keep it here in California for now and who knows, I might move back to CA then I don't have to worry about buying one again.

 

[gr3802]

I believe that you are wrong. The property is going to be treated the same way in both state because both states are community property states. What matters is whether or not community property is used to maintain the property.

In Texas, according to this web site:

https://ghristlaw.com/blogs/common-community-property-issues-in-texas-real-estate-law/

It is saying:

Rental Income

"Income from separate property accruing during marriage is community property. In re Marriage of Cigainero, 305 S.W.3d 798, 802 (Ct. App.—Texarkana 2010). Accordingly, where a mortgage loan used for purchase of separate property prior to marriage is paid down using income accumulated during the marriage, the community estate may be entitled to reimbursement for those payments as the payments did not come from separate property. Id"

I don't see where it mention at all about the location of the rental property or not.

While in CA, according to this web site:

https://www.cpcal.com/resources/summary-of-ca-law/

It is saying:

Separate property is defined as:

• Property owned before your marriage by one spouse as an individual
• Property acquired during marriage as a gift or from an inheritance
• Property acquired after your legal date of separation

Earnings, income or appreciation from separate property sources remain separate property. If there is a dispute about whether an asset is separate property, you must have proof that you acquired the separate property in one of these ways, and have documentation to trace the separate property back to the original source.


Regards

 

[Zigner]

Read here for a better understanding: https://txpd.org/TPJ/11/marital.html

You can each agree to treat the income from separate property as separate property instead of community property.

 

[xylene]

You clearly need a prenuptial agreement drafted by a lawyer or lawyers who can address the concerns in CA or TX.

 

[gr3802]

Read here for a better understanding: https://txpd.org/TPJ/11/marital.html

You can each agree to treat the income from separate property as separate property instead of community property.

If that's the only way then I definitely will DO.
Thanks Zigner!

 

[xylene]

Any DIY agreement would be worthless without a real prenuptial agreement where you both had proof of informed representation. You seem to be talking about a large income stream.

 

[HighwayMan]

Discuss your concerns with a divorce/family law attorney BEFORE you get married. If this is very important to you and your future it would be a worthwhile (and relatively small) investment to get professional legal advice.