For some gays in America, a legal victory becomes a tax headache

Mon Jul 22, 2013 4:57pm EDT
 
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By Patrick Temple-West

WASHINGTON (Reuters) - Married Californians Jeremy Turpen and Randy Brock celebrated last month's U.S. Supreme Court rulings on gay marriage. Now they face a tax headache.

Living in a state that recognizes gay marriage, they are entitled under the rulings to federal tax breaks enjoyed by other U.S. married couples such as tax-free, employer-provided healthcare for a spouse.

But still unclear is how they are to report the business income Brock gets from Florida, where same-sex marriage is not recognized.

For both the tax-collecting Internal Revenue Service and America's accountants, the answer is far from simple.

"I could talk to three different CPAs and get three different answers," said Turpen, who lives with Brock in Capitola. "That's not equality under the law from a financial perspective," he said.

The high court ruled in June that the federal government must recognize same-sex marriages that are legal in 13 states and the District of Columbia for the purpose of federal taxes, granting them a range of tax benefits for healthcare, retirement plans and a surviving spouse.

But the court also ruled that states can go on setting their own policies on gay marriage.

This raises questions for the IRS about the 114,000 legally married same-sex couples across the country such as Turpen and Brock.   Continued...

 
Chase Hardin (L) and Sam Knode (2nd L) join gay marriage supporters and court watchers hoping for U.S. Supreme Court rulings in the cases against California's gay marriage ban known as Prop 8 and the 1996 federal Defense of Marriage Act (DOMA), outside the court building in Washington, June 25, 2013. REUTERS/Jonathan Ernst