Pereira Approach
Pereira accounting is one of the two manners in California community property law that explains how to deal with community funds and/or labor used to enhance the value of separate property. The method is named after a 1909 divorce case, ''Pereira v. Pereira''. To calculate, courts will add the original principal amount of the business which is separate property to a reasonable rate of return expected from the nature of that business. The result is considered separate property. The remaining amount of the business is considered part of the community. This method is preferred when the management of the spouse was the primary cause of the growth or productivity of the business. In the case where the character of the business is the main reason for its growth and production, Van Camp accounting should be used. Pereira is used when the appreciation of the business is due to the skills, efforts or talents of the spouse who is working in the business. In that case, the separate property ...
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Van Camp Accounting
Van Camp accounting is one of the two methods California community property law uses to deal with community funds and/or labor used to enhance the value of separate property. The method is named after a 1921 divorce case, ''Van Camp v. Van Camp''. To calculate, courts will value the manager's services at a market rate and subtract community expenses from that amount. The result is considered community property. The effect of this is that the net income earned by the owner of the separate property results in the manner in which income is treated under California law The law of California consists of several levels, including Constitutional law, constitutional, Statutory law, statutory, and regulatory law, as well as case law. The California Codes form the general statutory law, and most state agency regulati ..., which is community property. This method is preferred when the character of the business is the reason for its income. In the case where the management is the main cause ...
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