I've looked into this quite a bit and haven't found any red flags as to why this would be a legal/tax issue, but I wanted to post the question here to see if the community might help me recognize anything I've overlooked.
The Situation: My wife and I are U.S. Citizens, living in the US. I am employed full time and my wife is a stay at home mom. I am the only person making money, my wife has no taxable income. I currently manage all of our financial assets. A portion of which is allocated towards investments.
What I want to do is open a brokerage account for my wife and begin transferring all my cash from my brokerage account into hers. The eventual end goal being, that all of our investment funds end up in her account and I close my brokerage account. Admittedly I'll still making the investment decisions, but I'll just be executing those actions in her account rather than my own.
The Question: Ultimately what I want to know is if there is any legal or tax implications to moving "our" money from my account to hers and if once all finances are fully invested again can she claim all the dividends and capital gains as her own source of income? I say "our" money, because we live in a community property state and as far as the state is concerned everything that is mine is also hers.
The final scenario would look like this:
Close my brokerage account, move all cash into her brokerage account
Future income - direct deposits still go to my bank account, transfer investable cash into her account and invest money.
We're not trying to avoid taxes in anyway and still plan on filing jointly. I don't foresee any tax pro Or con to this.
Given the comments - here is a bit more explanation as to why
First off, I recognize this seems like a very bizarre scenario and it is likely that majority of people will not understand the situation. As mentioned we are in no way trying to evade or reduce our tax liabilities which seems to be the focus of most people. However, that said my goal is specifically to reduce my personal (individual) reportable annual income.
There are specific circumstances where my individual income is scrutinized and it is in my best interest to reduce my reportable annual income level as much as possible. That being said, my wifes annual income is 100% excluded from that scrutiny. Therefor, it is in our best interest for my wife to report all capital gains as her own. At the end of the day the only income I want to be attributed to me is the direct income I receive from my full time employment and all other sources of income will be reported through my wife.