DissoMaster Dialogue

[ProPerDoper]

What is the name of your state? California

Anyone familiar with the California support program called DissoMaster?

For 401k deferals, where is the amount entered in? Adjustment to Income? Keep in mind the deferal is elective, not mandatory.

Additionally, for negative income as in the case of a rental property, is it appropriate to enter in a negative number in the location called "Other Taxable Income"?

Any recent cases known where the court has utilized "new spouse income" as contributing to the household living expenses for the purpose of calculating support?

 

[nextwife]

If they use new spouse income, shouldn't they also use new spouse expenses?

 

[ProPerDoper]

Expenses don't usually affect support in either case, whether it's for the parent or for the new spouse, unless the expense is a deductable one (mortgage interest, property taxes, etc) that has a positive effect on one's taxable income in the form of a deduction. This happens because those expenses/deductions make more funds available for the purpose of paying support.

I've read that if the court does use new spouse income, (and it can only do so under special circumstances, I.E. the outparent is not supporting the child) then it must also allow one-half a hardship deduction if the new spouse also has a child of his/her own.

I'm hoping to gain more input on the use of new spouse income, and learn of any that have had it applied by the court when calculating support.

An interesting side note: I've also noticed that the more income the new spouse makes, the less child support calculated. Apparently this is so because of the taxable effect.....more overall income in the family = more taxes paid. Yet the additional income isn't offset as long as the court doesn't add in some income from the new spouse as contributing to household expenses.

 

[LdiJ]

What is the name of your state? California

Anyone familiar with the California support program called DissoMaster?

For 401k deferals, where is the amount entered in? Adjustment to Income? Keep in mind the deferal is elective, not mandatory.

Additionally, for negative income as in the case of a rental property, is it appropriate to enter in a negative number in the location called "Other Taxable Income"?

Any recent cases known where the court has utilized "new spouse income" as contributing to the household living expenses for the purpose of calculating support?

I don't think that elective withholdings (such as 401Ks) are considered to be adjustments to income for dissomaster purposes. I think that the amount withheld is kept included in income.

If the rental property has a yearly loss, and that loss is due to depreciation expense, you can count on the judge throwing the depreciation out of the equation, because that's a non-cash expense. In fact, its not only a non-cash expense, but it actual increases disposable income, because it reduces tax.

 

[ProPerDoper]

Ldij, thanks for your reply

It's interesting how many different positions one can obtain. I've seen judges take the bottom line figure for rental income (whether income or loss) right from the litigant's schedule E, and input it into the DissoMaster.

I've also seen them input an elective 401k deferral into "adjustment to income" on the DissoMaster. Seems a grey area, subject to the court's descretion. The effect, depending on where the number is input varies greatly.

How does one take it out of the grey area and provide more of a black and white argument?

One thought is that I may call the legal tech's or facilitator at the Family Law Court. They're usually pretty helpful.

For perspective; I have 68% timeshare of my two minor children, yet I currently pay my ex support due to the significant difference in incomes.

 

[nextwife]

I don't think that elective withholdings (such as 401Ks) are considered to be adjustments to income for dissomaster purposes. I think that the amount withheld is kept included in income.

If the rental property has a yearly loss, and that loss is due to depreciation expense, you can count on the judge throwing the depreciation out of the equation, because that's a non-cash expense. In fact, its not only a non-cash expense, but it actual increases disposable income, because it reduces tax.

IMHO, IF one works someplace that does NOT provide a pension as part of their compensation package, 401K or IRA contributions should be treated as mandatory/necessary. Because , for example, if I am paid $40,000 but the employer is putting $5000 a year toward retirement in the form of a pension, and someone else is making $45,000 with nothing toward retirement, and defers $5000 toward retirement, they are ending up with basically the same total compensation. Yet, the second person will be paying CS on their retirement compensation, and the first will NOT be.

Retirement savings should be considered a necessity in the absence of any other retirement program. And many of us in the private sector will ONLY have retirement IF we save it ourselves.

 

[ProPerDoper]

Can I get a Harrumph???

(Anyone remember what movie that's from?)

I agree totally, and I'm in the same boat. I'm working on my argument even now.....

 

[MrsK]

IMHO, IF one works someplace that does NOT provide a pension as part of their compensation package, 401K or IRA contributions should be treated as mandatory/necessary. Because , for example, if I am paid $40,000 but the employer is putting $5000 a year toward retirement in the form of a pension, and someone else is making $45,000 with nothing toward retirement, and defers $5000 toward retirement, they are ending up with basically the same total compensation. Yet, the second person will be paying CS on their retirement compensation, and the first will NOT be.

Retirement savings should be considered a necessity in the absence of any other retirement program. And many of us in the private sector will ONLY have retirement IF we save it ourselves.

I agree with you NW.

 

[nextwife]

I agree with you NW.

Well, It seems obvious to me that one's income is the totality of the compensation package, not just salary. And that every individual SHOULD be presumed to have a corresponding responsibility to acquire retirement savings so as lot to latter be a burden on their kids and society.

In hubby and my case, retirement and child rearing will be simultaneous issues.

 

[ProPerDoper]

Ahh...but now you're thinking logically, and using the "F word" in Family Law. "Fair" is not allowed.

I assure you that the court considers the totality of one's income. I have many perks associated with my ability to pay support and income imputed for same, including use of a company car, reimbursement by the company for an in home office, entertainment (meals) paid for by the company when clients are in town, etc. All of this is put into "non-taxable" in the support program which provides for support to be paid at a higher rate than the taxable column, and done so following an evaluation by a Forensic CPA. (Big bucks expended for the eval too)

The court is only concerned about the care and provision for the children now. I guarantee that it would not consider an argument about being a burden to the children later in life. Care for them up to 18 yrs. of age. Beyond that, you're on your own.

 

[CJane]

So, NW? Should the dividends that are reinvested be considered as part of the obligor's income? Or do they get to take the reinvested dividends, PLUS whatever they invest annually in order to get the tax break from their income before CS is figured?

And what's the cap? If Stupidhead wants to invest as much as is humanly possible into his various IRA accounts, PLUS do a $10K gift into the children's funds that are under the UGMA, should his income be adjusted down to whatever is left after that $40K is gone?

Afterall, he's ensuring HE won't be a burden to his kids, and that they won't have to pay for college. And his CS obligation would be about $100/month.

 

[nextwife]

So, NW? Should the dividends that are reinvested be considered as part of the obligor's income? Or do they get to take the reinvested dividends, PLUS whatever they invest annually in order to get the tax break from their income before CS is figured?

And what's the cap? If Stupidhead wants to invest as much as is humanly possible into his various IRA accounts, PLUS do a $10K gift into the children's funds that are under the UGMA, should his income be adjusted down to whatever is left after that $40K is gone?

Afterall, he's ensuring HE won't be a burden to his kids, and that they won't have to pay for college. And his CS obligation would be about $100/month.

Two people making comparable compensation should pay comparable CS. So, if,say, stupidhead is NOT getting any retirement, and assh** has a pension plan that puts the equivilant of 15% away for his retirement, and assh** is earning a salary that is 15% less. stupidhead should be able to defer a comparable retirement amount and pay a comparable CS to what AH pays. Everything else being equal. That's just an example. Two people earning exactly the same salary, but one IS getting a retirement plan and the other is NOT, are NOT earning comparable incomes.

 

[ProPerDoper]

Just to correct my earlier post:

I recall now that when I did have an elective deferral into my 401k from monthly salary, the amount was not deducted from my gross pay. However the deferral amount was added into the adjustment to income catagory to compensate for the additional tax saving that I was apparently enjoying.

This made more funds available for support via the DissoMaster calculations. At the time, not even my attorney understood how the court managed the deferral numbers. I have since spoken to a more experienced attorney and learned that in fact, an elective retirement deferral actual makes more funds available for the payment of support.

 

[CJane]

Two people making comparable compensation should pay comparable CS. So, if,say, stupidhead is NOT getting any retirement, and assh** has a pension plan that puts the equivilant of 15% away for his retirement, and assh** is earning a salary that is 15% less. stupidhead should be able to defer a comparable retirement amount and pay a comparable CS to what AH pays. That's just an example. Two people earning exactly the same salary, but one IS getting a retirement plan and the other is NOT, are NOT earning comparable incomes.

But what you're saying only works when the incomes are comparable. And, at least in the case of asshat and stupidhead, that's not EVER going to be the case. Asshat is a cop (w/a pension) and Stupidhead is an executive who can (and has in the past) live quite comfortably off of nothing but the dividends from his investments.

 

[ProPerDoper]

At the risk of getting my head bitten off....

The advice wasn't asked for, but here goes....

While I'm unsure what state stupidhead resides in, there are plenty of California decisions (and published) that support the argument that stupidhead must maximize his income for the support of his children. If he elects not to, the court can impute income (Wage Assignment Order) equal to that which he could make if he chose to.

It's difficult, requires lots of evidence, and likely an vocational evaluation, but I'm just a lowly Pro Se litigant, yet I caused my ex to undergo two evals, which successfully got her back to work.