Net Demand

Short Losses

Short Gains

Earned income. You must treat earned income that is not trade or business or partnership income as the income of the spouse who performed the personal services.

Generally, earned income means wages, salaries, professional fees, and other compensation for personal services.

It does not include amounts paid by a corporation that are a distribution of earnings and profits rather than a reasonable allowance for personal services rendered.

If capital investment and personal services are combined to produce business income, all of the income is treated as trade or business income and none as earned income.

Earned income also does not include any social security or equivalent railroad retirement benefits you may receive during the year.

Trade or business income.

You must treat income from a trade or business that is not partnership income as the income of the husband unless the wife exercises substantially all of the management and control of the business.

Partnership income or loss.

You must treat income or loss from a trade or business carried on by a partnership as the income or loss of the spouse who is the partner.

Separate property income.
You must treat investment income

from the separate property
of one spouse as the income of that spouse.

Other income.

You must treat all other community income as provided under the state community property law.