Question

Jack and Jill are married. This year Jack earned $72,000 and Jill earned $80,000 and they received $4,000 of interest income from a joint savings account. How much gross income would Jack report if he files married-filing-separate from Jill?

A) $72,000 if they reside in a common law state.
B) $74,000 if they reside in a community property law state.
C) $76,000 if they reside in a common law state.
D) $78,000 if they reside in a community property law state.
E) None of the choices are correct.
D

Answer 1

D) $78,000 if they reside in a community property law state.

Step-by-step explanation:

Community property law is a type of joined ownership between married couples. This means that money earned by either spouse during marriage and also all properties and holdings acquired by either during marriage is owned equally by the husband and wife.

Therefore, in this situation the money owned by the couple = 72000 + 4000 + 80000 = $156,000.

If Jack is filling for marriage-filing-seprate, under the community property, half of the joint money is his. So Jack gross income = 156,000 ÷ 2

= $78,000.