Windfall For “Unmarried’ Couples
CCA 201021050 may provide a significant windfall for some unmarried couples. It is directed toward registered domestic partners in California and some commentators indicate that it is logically applicable to California same-sex married couples. The ruling emphasizes the point that state law determines the ownership of property and that the taxation of income follows the ownership of that income.
Breaking Up is Hard to Do
There used to be a joke that there are three ways to get out of a burned-out tax shelter. The first was to put the interest into a defective grantor trust and then cure the defect. It was a really neat idea. It doesn’t actually work, but it was clever. Then there was dying. Pretty drastic, but it worked (until this year anyway). Finally, there is giving it to your spouse and getting a divorce. Still works.
Follow Me
Over and over again courts have said that there is nothing sinister in so arranging one’s affairs as to keep taxes as low as possible. Everybody does so, rich or poor; and all do right, for nobody owes any public duty to pay more than the law demands: taxes are enforced exactions, not voluntary contributions. To demand more in the name of morals is mere cant.