My partner and I are registered domestic partners in California. We have a joint brokerage account at Vanguard. I'm the first person listed on the account, so Vanguard issues a Consolidated 1099 to me.
Let's just assume for simplicity that the only community property income we have is $1000 Qualified Dividends reported on 1099-DIV. I understand we each need to file Form 8958, and split the dividends 50/50.
On TurboTax, I downloaded 1099-DIV from Vanguard directly, so initially TurboTax considered the entire $1,000 to be my income. Toward the end, when I got to Community Property questions, I entered minus $500 on the "Community Property Income Adjustments" screen. TurboTax then put down -$500 in Schedule 1 line 8 (which flows to Form 1040 line 8), but TurboTax didn't adjust Form 1040 line 3a (Qualified dividends). Is this the correct way of doing it? It doesn't sound right because I should be taxed as if I received $500 QDI, not $1000 QDI. Was I supposed to manually enter the 1099-DIV with only half the amount? (but then TurboTax would reduce yet another $500 of my income on line 😎
