What constitutes community income?

Study for the Liberty Tax School Test with flashcards and multiple choice questions. Each question includes hints and explanations to help you understand. Prepare effortlessly and excel in your exam!

Community income is defined as income that is earned or acquired during a marriage and is generally considered to belong equally to both spouses, regardless of who earned it. This includes salaries and wages earned by either spouse while they are married.

In the context of the question, the correct answer highlights that income from salaries and wages is considered community property. Under community property laws, this income typically must be shared equally between spouses, which reflects the principle that both partners contribute to the household during the marriage.

The other options do not qualify as community income; for instance, gifts received by either spouse are generally classified as separate property and are not subject to division as community income. Similarly, income derived from separate legal entities or investment income from separate accounts also falls outside the definition of community income, as these may pertain to assets owned individually by one spouse rather than jointly earned during the marriage.

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