Community property state refers to a state in which spouses hold property that is acquired during marriage. However, any property acquired through inheritance or gift is not recognized as a community property. Community property states treat marital income differently than other states. For example, Texas is a community property state, which means that property is classified as separate or community. In Texas, marital property is presumed to be community property. However, any separate property owned by a spouse before marriage, acquired during marriage by gift, devise, or descent, or is the recovery for personal injuries is not a community property. [Smith v. Commissioner, T.C. Memo 1995-406 (T.C. 1995)].

In the U.S. there are ten community property states which includes:

1.Arizona,

2.California,

3.Idaho,

4.Louisiana,

5.Nevada,

6.New Mexico,

7.Texas,

8.Washington,

9.Wisconsin,

10.Alaska.