My wife and I own rental property and file separate returns. How should the income be reported – by the person who has legal title to the property, or equally, regardless of how legal title is held?
The answer depends on whether the property is considered: (i) one spouse’s separate property; (ii) community property of both spouses or; (iii)separate property of one spouse in which the other spouse as a marital property interest under the laws of the state where your reside. If both spouses own the property equally or have equal interest in the property under the laws of your state, then you must split the income and expenses equally. If one owns the property as separate property, that person claims the income and expenses. Of course, if you file a joint return, this issue becomes moot.
