California Community Property Question

Oct 08, 2007 3 Replies

(Since my question has both legal and tax issues, I'm posting to these two newsgroups.)



Moderator: In the future, just crosspost listing misc.legal.moderated first



Before marriage person A purchases a condo, and lives in it for several years. Person A then marries, lives elsewhere, and rents the condo to a series of tenants. Condo ownership was not formally changed. Rental income deposited to, and expenses (including mortgage payments) paid from, a joint checking account into which both husband and wife deposited their pay checks and from which both wrote checks for various other purposes. Couple filed joint tax returns, including the condo related rental income and expenses, and deducted interest on the condo mortgage. Person A is now contemplating divorce, and wonders if the condo has become community property by default, since rental income and associated expenses, and mortgage payments on the condo, flowed through the joint checking account with A's spouse. Any insight appreciated that would help me advise party A. I would especially like a good reference book addressing California issues of community and separate property issues as related to divorce. I have reviewed my (old) Nolo Press catalogue and did not see anything that seemed on target.



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---------- CWLee Former slayer of dragons; practice now limited to sacred cows. Believing we should hire for quality, not quotas, and promote for performance, not preferences.



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In California real estate per se does not become community property by default. But the community may get an interest in the increase in value in the property. Rental income from separate property would not have been community property if it had not been comingled in a joint account. If they had kept it separate, it would still all be separate. But since it was, it will probably be considered a gift to the community. There is a formula for calculating the community interest based on community mortgage payments, but I don't remember it off the top of my head. Stu

Thanks Stu, Can you please point us to the california law codes where we can read this info. thanks

You can find the California Family Code here:

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But the rules for determining are probably found in the cases. Your best bet is to go to your nearest law library (found in law schools and in most courthouses) and check out one of the books on division of property in divorce. Stu

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