Community property
Community property is a classification for property associated with spouses under the rules of a community property state. In community property states, property acquired during marriage is generally presumed to be community property, though the presumption and treatment of separate property vary. For owners of businesses, real estate and private investments, classification can depend on domicile, acquisition, income and tracing.
How it works
California applies a preponderance of the evidence standard.
In community property states, mixing separate property with community property can change its classification unless the separate portion can be traced through withdrawals, deposits or payments. Income from separate property is treated differently across the states listed.
Where it shows up for owners of businesses, real estate and private investments
In community property states, an asset's location alone may not determine its classification. California's community property rules require California domicile. Oregon describes a presumption for property acquired during marriage while living in a community property jurisdiction.
Florida's disposition act is described as covering certain personal property wherever located when it was community property, derived from it or traceable to it. The act is also described as covering certain property acquired while living in a community property jurisdiction, plus income and traceable property.
Points that are easy to confuse
In community property states, a presumption about property acquired during marriage does not mean every asset is community property. Exceptions exist for separate property, and the standard used to establish it differs by state.
In community property states, contributing community property to one spouse's revocable trust did not make it that spouse's separate property under the federal appeals court holding described.
Thresholds and rates change. Check the state's own current figures.
Common questions
Does buying property in California make it community property?
Buying property in California does not automatically make it community property for owners who are not domiciled there.
Is income from separate property always treated the same way?
In community property states, treatment varies. Arizona, New Mexico, Nevada and Washington treat income from separate property as separate, while Idaho, Texas, Louisiana and Wisconsin treat it as community property. Wisconsin is named marital property on the IRS list.