Thanks for the clarification on Form 8958.
I’d like to confirm a few follow-up points:
If we divorced mid-year in a community property state and only one spouse had W-2 income (the other spouse did not work at all), is allocating income 50/50 for the married portion of the year required, or is it optional?
Does the allocation need to match or be checked against the divorce decree? In this case, the divorce was a lump-sum buyout to divide community property, and it didn’t specifically address tax allocations.
If the non-working spouse must report 50% of the community income for the married portion of the year, does that mean they would owe income tax out of pocket (since no withholding was in their name)? Or is there some adjustment mechanism for that?
Just trying to understand whether this is mandatory under community property rules, and how strictly it’s tied to what the divorce decree says.
Thank you!
