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How is Rental Income Calculated and Factored Into Child Support

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  • 07-07-2016, 08:02 AM
    pricklypear
    How is Rental Income Calculated and Factored Into Child Support
    My question involves a child custody case from the State of: Florida

    My ex has filed for a mod. He has, for many years, lied about his income and gotten away with it because it wasn't worth my trouble and expense to try to prove it since he is paying support and I get it on time. It has always been easy for him to hide his true income because he ran his parent's business (and was a partner with a percentage owned of at least 30%), and he was able to cook the books in addition to the cash he took from the registers. This time around, he's so grossly misrepresented his income that he filed for me to pay him. I have the kids 209 overnights/yr.

    Recently, he claimed he was "laid off" and he moved from South FL to North FL (to the county in which the children and I live). He lived here for 4 months before taking a job as a correctional officer (no prior experience) for 30k/yr, refusing to even apply for jobs in Networking or VoIP (which he is well qualified to do and would make considerably more). I even sent him links to several Networking and VoIP jobs when he moved here. During this time, he paid rent to the person he was staying with, as well as his CS, insurances, and other expenses (all on time). He did not claim unemployment. I suspect he was/is still getting cash from that business, and have some records to show large amounts of money moved in/out of his bank, but many records are missing (presumably the ones he doesn't want me to see). He also took his schedule K out of his tax returns.

    He has a 2013 vehicle that belonged to the business and was given to him (not listed on his FA). He has a cell phone that is paid by the business (not listed on his FA). He receives a regular uniform allowance from his CO job (not listed on his FA, yes I can prove). He still has his house in South FL, which he listed on his FA as being worth 176k, but it's actually worth ~254k (yes, I can prove). He owes ~186k + ~20k second mortgage. He also just purchased a 130k home here in North FL, just 2 weeks after filling out his FA, so he did not list it on his FA even though he would have already known he was buying it. He listed only $243 in cash assets, even though he would have been required to have cash in the bank to close on that house. He lists his gross as only $2300/mo (his CO pay is higher, I have proof), which is clearly not a good enough debt-to-income ratio for a bank to approve a 130k house, especially with a huge house already owned that has a 186k balance + 2nd mortgage on it.

    So now to get to my question...his sister and mother live in his house down south and pay the mortgage (yes, I have proof). They deposit the money into one of his many bank accounts each month. I do not know if they have any kind of rental agreement, but no doubt they would draw up a fake one if needed. He doesn't go down (or hire anyone) to do maintenance on the property. He could easily get much more rent for this property (yes, I have proof), but he chooses not to because he doesn't want the appearance of extra income. He thinks that because (it appears) that only the mortgage is paid, and he makes it look like a loss on his taxes, that this isn't income. I've tried to find reliable information about whether this is income or not, but due to that wording of "gross minus usual and necessary expenses", it's iffy at best. Is this considered rental income or is it in-kind payments? He's not renting it to make a profit, he's simply having his mother and sister pay his mortgage, but they do live there. Meanwhile, his sister owns a house in the same town that she moved out of to live in my ex's house because his is much bigger, so it's not like his family has nowhere else to go. Just trying to figure out my chances of proving he is lying about his income because I know that is really tough to prove, especially without a lawyer or forensic accountant.
    Has anyone else been successful with a similar situation? Searched case law, but having trouble finding anything similar.
  • 07-09-2016, 08:11 AM
    Mr. Knowitall
    Re: How is Rental Income Calculated and Factored Into Child Support
    You can suggest to the court that some amount of rental income can be imputed for the home, and see how the court rules. You should be prepared to document rental values for similar homes in the same general location as your ex's home. You need to keep in mind that rental income is calculated after expenses and depreciation, and with the mortgages you describe along with the other costs of ownership you may find that there's little to no income that could actually be imputed.
  • 07-09-2016, 09:00 PM
    llworking
    Re: How is Rental Income Calculated and Factored Into Child Support
    Quote:

    Quoting Mr. Knowitall
    View Post
    You can suggest to the court that some amount of rental income can be imputed for the home, and see how the court rules. You should be prepared to document rental values for similar homes in the same general location as your ex's home. You need to keep in mind that rental income is calculated after expenses and depreciation, and with the mortgages you describe along with the other costs of ownership you may find that there's little to no income that could actually be imputed.

    I am pretty certain based on the information that she has given is that the rental, even at FMV, would not produce much, if any profit after expenses and depreciation. Now, if he is claiming a huge loss on the rental property, then I would certainly ask that he be imputed FMV for the rental to reduce the loss. She should not however, expect that there is going to be any appreciable profit from the rental that could be included in a child support calculation.
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