THE GAY DIVORCEE

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Thanks to BO’s recent “endorsement” of same-sex marriage the internetis a-BUZZ with the topic.  This includesthe “tax blogosphere”. A few of my fellow tax-bloggers cover the tax aspects of same-sexmarriage extensively. Peter J Reilly, author of the blog “Passive Activities” for FORBES.COM(where I have been a frequent guest-poster), writes frequently on thetopic.  Click here for his latestgay-marriage post. Also Enrolled Agent Jason Dinesen, who writes “Dinesen TaxTimes”.  Jason posts every Monday aboutgay marriage and taxes.  Click here forhis latest related post.  Currently the federal government, and the IRS, does not recognize same-sexmarriages, as per the Defense of Marriage Act. From an income tax point of view I expect most same-sex couples would not be better off if they were offeredthe same filing options as “traditional” married couples.  However there would be potential forsubstantial benefit when it comes to the federal estate tax. I have very few clients who I either know, or suspect, are a gaycouple.  Only one couple would benefitfrom being able to file tax returns as married. With the others, both partners are employed and would probably pay moretax, thanks to the “marriage penalty”, by having to file as married taxpayers. In states that recognize same-sex marriages, and permit gay couples tofile as married, the fact that these taxpayers cannot file the same way federallycauses extra work for the tax preparer, but also generates corresponding additionalincome.  I have not yet had to deal withthis situation in my practice.
I am not opposed to the legal recognition of gay marriage on thefederal or state level.  I am also not anactive advocate.  I would not campaignagainst the issue, nor would I campaign for passage of supportive legislation.  If it happens I would be fine with it - butit is not a priority issue for me.   I expect that I would leave the issue to the individual states, and wouldallow same-sex couples whose tax home is in a state that recognizes themarriage to file federal returns as married couples.          TTFN