Legal Question in Real Estate Law in California

Re: Selling Real Estate while separated

No, for the following reason: when a couple stops living together and separate with some degree of permanence, the current income of each spouse ceases to be community property. There is a statute to that effect in the Family Code; I don't have it handy but can send you the complete text later if you contact me directly.

The information to the effect that he is not yet licensed and that he may be avoiding income taxes on this income is not relevant to the issue of whose income this will be.

However, since you are still married, you still have the option of filing a joint tax return. If you do, be sure to obtain independent tax advice before signing a joint return that may under-report income, even if it's his.

Re: Selling Real Estate while separated

You might re-post for a family lawyer. I'm not one. I would argue that if substantial effort went into the sale of the property before you separated, you might have an equitable claim to some of that income. But, that's why I'm not a family lawyer.

Re: Selling Real Estate while separated

It's Family Code section 771. I'm not a family law expert either, but after reading Mr. Cohen's response, and not knowing the answer, I checked some of the case law interpreting FC771. The cases I skimmed suggest that the entire commission will be awarded based on the date upon which the commission was finally earned, presumably the date the transaction closed escrow, and not when the effort to earn it was expended. The theory is that earnings such as bonuses, stock options and commissions are, at most, a "mere expectancy" until the spouse has a right to the earnings and not just a hope for them. In the case of a real-estate deal, the commission usually isn't earned until the deal closes. Thus the date the deal closes governs whether the commission is community or separate property.