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Is LLC income factored into spousal support?

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InterdudeZ

Junior Member
What is the name of your state? Virginia.
My wife and I started a business some years ago. I sold all of my shares to her in 2003. She left our home in March of this year and I am applying for spousal support. My attorney says that the judge will calculate spousal support based on her gross income less "reasonable business expenses". Her income is huge (seven figures) but she says it is really about $275,000 since the income that shows up on her tax returns is merely LLC "declared" income that is on paper only. So, do judges consider the LLC pass through income that shows up on the returns as income or not? It will make a huge difference in both SS anc CS and the PSA. Does anyone know?
 


LdiJ

Senior Member
InterdudeZ said:
What is the name of your state? Virginia.
My wife and I started a business some years ago. I sold all of my shares to her in 2003. She left our home in March of this year and I am applying for spousal support. My attorney says that the judge will calculate spousal support based on her gross income less "reasonable business expenses". Her income is huge (seven figures) but she says it is really about $275,000 since the income that shows up on her tax returns is merely LLC "declared" income that is on paper only. So, do judges consider the LLC pass through income that shows up on the returns as income or not? It will make a huge difference in both SS anc CS and the PSA. Does anyone know?
That is a complicated situation.

Its fairly easy to demonstrate that "pass through" income is not actually disposable income....if its not.

Basically, the true income that a person recieves from a business is the net profit of the business, assuming that the net profit is actually available to be distributed to the business owner. A company could easily have sales in the 7 figures...but only have profit of 275,000. A company could also have 275,000 in net profit, but not actually have that specific amount of money available to be distributed to the owner.

This is probably a situation where an accountant should be hired to consult with your attorney.
 

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