This question has been asked a number of times but never answered clearly. I entered a Registered Domestic Partnership on May 1. We are in a community property state (CA). We have fully mingled finances and have been mingled since before the RDP began. There are at least three ways I could imagine needing to classify our income/withholding (NOTE: this question is only about how to handle this first year, where we were not in an RDP all year; it is clear how to do this for subsequent years):
1) Easy: since we were in a RDP on 12/31, all income/withholding can be considered community property
2) Not too hard: Pro-rate it. Since we were single for 4 months and RDP for 8 months of the year, 1/4 of all income/withholding is separate property and 3/4 is community property to be divided 50-50
3) Very onerous: the precise amount of income/interest/dividends from the first 4 months must be determined and considered separate property and all the rest is community property. This would involve combing through monthly statements and paystubs.
Is (1) or (2) acceptable? Is it at our discretion which one to choose?
Please no answers with links to https://turbotax.intuit.com/tax-tips/marriage/five-tax-tips-for-community-property-states/L4jG7cq7Z or https://www.irs.gov/pub/irs-pdf/p555.pdf The answer to this question is NOT there.
