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IRS.gov Website
Publication 3402
taxmap/pubs/p3402-006.htm#TXMR2e04cf8c

Community Property

rule
A married couple may choose to treat a business entity as a partnership or as a disregarded entity if:
  1. The business entity is wholly owned by the couple as a community property under the laws of a state, a foreign country, or possession of the United States;
  2. No person other than one or both spouses would be considered an owner for federal tax purposes; and
  3. The business entity is not treated as a corporation under Regulations section 301.7701–2.
A change in reporting position will be treated as a conversion of the entity.