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Rental Income and Child Support Payments

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Florida law establishes a complex set of guidelines for determining child support obligations. The key to these guidelines is looking at a parent’s gross income. Such income includes not just the parent’s normal salary or wages from their job, but also any self-employment or business earnings, as well as certain government benefits, such as Social Security or unemployment compensation.

Appeals Court: Parent May Claim Losses on Rental Property Against Gross Income

Another form of income that must be included in child support calculations is income derived from owning and operating rental properties. On this point, Florida’s child support guidelines specifically define rental income as “gross receipts minus ordinary and necessary expenses required to produce the income.” In other words, the parent may deduct the expenses of maintaining the rental property from the rental payments actually received.

So what happens when the cost of the rental property exceeds the rent? Can the parent then claim a loss–i.e., negative income–for purposes of determining their child support obligations? According to one recent Florida appeals court decision, the answer is yes.

In this case, Marenco v. Marenco, a mother appealed the calculation of child support obligations as part of her divorce from the father. The mother had purchased a townhouse prior to the marriage and maintained it as a rental property. She reported losses on the property, which the trial court failed to account for her in the calculation of her gross income.

The Florida Second District Court of Appeals said that was a mistake. The Court noted that “[a]lthough [the mother] has been renting the townhouse to a tenant, she has incurred monthly losses because of the mortgage and maintenance fees.” And there was “no justification for failing to account for negative rental income just as we would account for positive.” Indeed, Florida law expressly allows a parent to deduct the “ordinary and necessary expenses” associated with rental income. This is because the whole point of calculating a parent’s income is to “ascertain how much money is available to support the child.”

Speak with a Florida Child Support Lawyer Today

It is important that both parents, when choosing to proceed with a divorce, provide a complete and accurate picture of their income to the court. Florida requires both parents to file financial affidavits disclosing all sources of income. This assists the court in making the necessary gross income calculation under the child support guidelines.

In some cases, the court may also “impute” income that a parent did not actually earn. Imputation is designed to prevent a parent from skirting a child support obligation by voluntarily quitting their jobs or reducing their working hours to less than full-time.

At the end of the day, the parents and the court all want what is best for the children who are caught in the middle of the divorce. That is why it is important to work with an experienced Boca Raton child support attorney who can advise you on how the law works in Florida and assist you in resolving these and other outstanding legal issues. Contact WiseLieberman, PLLC, at 561-488-7788 today to schedule a consultation.

Sources:

flsenate.gov/Laws/Statutes/2019/0061.30

scholar.google.com/scholar_case?case=7978105882590654181

https://www.wiselieberman.com/what-is-imputed-income-and-how-does-it-affect-an-award-of-child-support/

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