Child support question

[mike.r]

Hi All,

I sold my business and had capital gain this year becuase of it. Do I need to pay more child support although my monthly incom didn't change and I will not have such a gain next year?

Thanks

Mike

[blinkandimgone]

Did your line 150 change?

[mike.r]

yes, they added the sales proceeds to it

[HammerDad]

Yes, any income will affect your child support. It will be increased for the year where you had a large capital gain and then decrease the next year when you income normalizes.

If your line 150 changes, so does your c/s.

[mike.r]

so if my line 150 shows $250,000 I now have to pay my ex wife like $3,000 a month for 2 kids?

I have a porblem with it since my kid already comes to me with duck-tape on his shoes although my ex is getting a large amount every month. She just don't spend it on the kids, she rather go to mexico for a week, drive a new car all with $22,000 per year salary....I wonder how?

[HammerDad]

Originally Posted by mike.r

so if my line 150 shows $250,000 I now have to pay my ex wife like $3,000 a month for 2 kids?

I have a porblem with it since my kid already comes to me with duck-tape on his shoes although my ex is getting a large amount every month. She just don't spend it on the kids, she rather go to mexico for a week, drive a new car all with $22,000 per year salary....I wonder how?

Unfortunately, it isn't a matter of whether you like, it is a matter of "those are the rules".

The next year when your income normalizes, the amount you are obligated to pay will drop back to the normal amount.

And, as much as it sucks (I am a payor also), we don't get a say in what c/s is spent on. So long as the child(ren) aren't starving or neglected, how the payee uses the c/s is up to their discretion. I know it probably doesn't cost that much to raise the kids, but the (IMO faulted) theory is that the children should enjoy the same standard of living as if their parents stayed together.....(when the reality is, no ones standard of living should stay the same as life changes).

[beebie]

You might be able to argue this or not. I am sure that a one time non-recurring increase might be the argument. Or not. I don't know but one place to look is the Federal Child Support Guidelines and below is excerpts from Schedule III which might apply (probably applies to child support as well as spousal support):


Capital gains and capital losses
6. Replace the taxable capital gains realized in a year by the spouse by the actual amount of capital gains realized by the spouse in excess of the spouse's actual capital losses in that year.

Pattern of income
17. (1) If the court is of the opinion that the determination of a spouse's annual income under section 16 would not be the fairest determination of that income, the court may have regard to the spouse's income over the last three years and determine an amount that is fair and reasonable in light of any pattern of income, fluctuation in income or receipt of a non recurring amount during those years.

[dinkyface]

I'd suggest searching on the canlii website for

"child support" income "capital gain" "sold business" non-recurring

One case I saw there noted if it was a VERY large amount, that the income could be spread over 3 years for the purposes of calculating CS.