Child support is always tough to calculate when the obligor has a business with assets used to produce income, i.e. farming etc. Thanks to tax laws, farmers and other business owners can accelerate depreciation which can in turn dramatically reduce net income for child support purposes. Case law dealing with depreciation deductions varies. If HB 5771 becomes law, the obligor would only be allowed to deduct straight line depreciation of capital assets. The statute would not apply to real estate depreciation.
The proposed legislation also would allow a deduction from net income for "reasonable expenditures for the benefit of the child and the other parent, exclusive of gifts." This is sure to engender litigation in the future over what expenditures are allowed. However, it seems that an obligor could argue that payment for daycare expenses, clothing etc. would be covered by the statute.
The House extended the deadline for final action on the bill to May 9, 2009. Stay tuned . . .
The proposed legislation also would allow a deduction from net income for "reasonable expenditures for the benefit of the child and the other parent, exclusive of gifts." This is sure to engender litigation in the future over what expenditures are allowed. However, it seems that an obligor could argue that payment for daycare expenses, clothing etc. would be covered by the statute.
The House extended the deadline for final action on the bill to May 9, 2009. Stay tuned . . .
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