How to adjust "Community Property Income" for separate rental property income in Texas?

[csluvbbq]

My wife and I are filing "married filing separately" in Texas. How do I report $18,000 in rental income from my separate property as community income? Do I subtract $9,000 from my income and add $9,000 to her income on the "Community Property Income Adjustments Page"? How do I report $10,000 she earned in wages? Do I subtract $5,000 from her income and add $5,000 to my income on the "Community Property Income Adjustments Page"?

[Anita01 · Accepted solution]

In theory you are correct.  If the rental property is owned by only one of you, though, it would not become community property unless you made deposits for the income received and paid the expenses out of a jointly owned bank account.  If you keep both the property ownership and the treatment of the cash in a separate account not owned by both of you, then it's not community property and the income would not be split as community property.

[csluvbbq]

Thanks for that. It was very helpful. Now as far as her wage income, I let her deposit about $10,000 into my separate account. Do I report half of it in adjustments as an addition to my income?

[Anita01]

You would report income according to how much of it is shared with you.  If she is depositing $10,000 of her wages into your account and depositing the rest into her own separate account, then your share would be the $10,000, not just a standard 1/2 adjustment.  On the other hand, if the balance after the $10,000 is deposited into an account you both share, then your community property income would be 1/2 what is deposited into your joint account plus the $10,000 deposited directly into your account.