Thus, from 1930 until 1948, when Congress authorized the now-familiar joint tax return, the tax liability of a married couple in a community property state differed significantly from that of a married couple in a common-law state whenever only one spouse had taxable income.
The single household (income-splitting) influence of community property states caused many common-law states to begin adopting community property characteristics in state laws.
Example 2--Common-law state: X is married to Y; they live in a common-law state and each is 50 years old.
Example 4--Common-law state: X is married to Y; they live in a common-law state and each is 60 years old.
Typically, a taxpayer in a common-law state holds property with a spouse as a joint tenant.
Joint tenants: If D and K lived in a common-law state and owned the property as joint tenants or tenants by the entirety, only half of the residence would receive a new basis; thus, K's new basis would be $200,000 (($300,000 x 0.
In a common-law state
, rights to pension benefits or receivables attributable to the labor of one former spouse could be 'equitably distributed" without tax consequence to that spouse, with the other former spouse receiving cash or other assets.
Moreover, as a result of the Earl decision, couples in common-law states
had no way to replicate this intra-spousal income-shifting.
Chapters cover contrasts between the estates of persons in community-property jurisdictions and those in common-law states
, and restraints on the transfer of wealth.
The Administration's proposal would eliminate the (apparent potential) inconsistent treatment among decedents in community property and common-law states, by disallowing the stepped-up basis for property that never passed from a decedent to a surviving spouse in community property states.
Under present law, separate property of one spouse receives similar treatment in common-law states and community property states.
Most of the Supreme Court justices of antebellum Louisiana were trained in common-law states
, but Louisiana slave law continued to be influenced by formal codes inherited from the French and Spanish colonial periods.