BY BRIAN CHASE

January 1 has passed. We have all made our New Year's promises. Most of us have sworn that we will get back to the gym, stop smoking, cut out the drama, or some combination of the three.

But there is more to the New Year than short-lived resolutions. It's time to start getting ready for the only thing as inevitable as death. No, not another Cher farewell tour. I'm talking about taxes.

Tax time can be very stressful for same-sex couples. The federal government does not recognize same-sex couples, but California does, through domestic partnership. This cold shoulder from Uncle Sam can cause some real headaches.

Starting this year, domestic partners in California must file their state income tax returns the same way that married couples do. People in domestic partnerships cannot file as single. The catch: domestic partners still need to file as “unmarried” when they file their federal return with the IRS. Not only is this insulting, it also causes real problems.

California uses the adjusted gross income (AGI) from your federal tax return to calculate your state income tax. For domestic partners, the AGI on your federal return will be calculated as if you were single, so it will not be the right number for your California return.

Fortunately, the California Franchise Tax Board (FTB) plans to (actually it probably will have by publication date—check this—we may be able to provide a link to the forms by early January) issue a worksheet to help domestic partners adjust their federal AGI to get the correct number for their California return. Taxpayers can also prepare a “mock” federal return to calculate their California AGI. Either way will work.

There is some good news for domestic partners on the tax front—an unfair law regarding real estate taxes has been fixed. Before 2006, anytime a domestic partner received real estate from his or her partner the property was reassessed, so the property taxes went up. Married spouses were not reassessed, so when a widow inherited property from her late husband, her property taxes stayed low.

Lambda Legal's client David Pierce saw his taxes jump from $3,053 to $7,826 per year, and was charged an additional $4,248.54 “supplemental assessment” when he lost his partner of fourteen years to cancer. When Lambda Legal learned about David's story, we worked with Senator Christine Kehoe to change the law. Lambda drafted SB 559, which allows people like David to roll back their taxes to where they would have been if domestic partners were treated like married couples.

So if you know anybody who had their taxes hiked when they received property from their partner, make sure they call their county assessor to have their taxes rolled back. Nobody should have to pay extra taxes just for being in a same-sex relationship.

Do you have a legal puzzler you'd like to see addressed by a Lambda Legal attorney? Call 866/542-8336. Keep in mind that all submissions are for publication and will not be confidential. For more information about Lambda Legal, visit www.lambdalegal.org.