Question: While they were married to one another, John and Jane were both employed as real estate sales agents. In 1999, a year before John and

While they were married to one another, John and Jane were both employed as real estate sales agents. In 1999, a year before John and Jane separated, John's accountant recommended that he create a business for tax purposes. John created Manhattan Associates and filed a d.b.a. claiming it was a general partnership, with Jane named as his partner. Jane had no knowledge that this was done. After they separated, John never changed the status of the business to a sole proprietorship, although he was the only one actually working in the business. In fact, in 2004 he renewed the d.b.a. without change. John also filed partnership federal income tax returns for Manhattan Associates in which he apparently indicated the entity was instead a limited partnership, with the other partner holding only a .01 percent interest. After the parties separated, John generated substantial commissions from this business. Under the community property laws, a spouse's income after separation is usually that spouse's separate property. Jane claimed that rule did not apply because Manhattan Associates was a partnership in which she was a general partner and was therefore entitled to share in the profits of the business. How would you resolve this?
See In re Marriage of Geraci, 144 Cal. App. 4th 1278, 51 Cal. Rptr. 3d 234 (2006).

Step by Step Solution

3.40 Rating (175 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

In Geraci the court found that wife was not a general partner In ... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Document Format (1 attachment)

Word file Icon

874-L-B-L-C-L (222).docx

120 KBs Word File

Students Have Also Explored These Related Business Law Questions!