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Financial Issues This forum is for discussing any of the financial issues involved in your divorce.

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Old 07-23-2016, 01:32 PM
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Default Rental income and maternity leave.

I am having a disagreement with my ex husband re: what our income is this year. He pays offset child support as he earns more than I do by about $20,000. I'm getting about $230/mos.

We also use our income to decide how much we each pay for daycare fees and sports/activities.

Issue #1. I had a tenant living in my home. I claimed the income and with deductions i broke even and did not have an increase in my income. Even thiugh I claimed it my line 150 is not more than my salary because of the deductions (ir property taxes, insurance, internet bill, home repairs)

Ex says i have to take line 150 and then add my rental income. He says i cannot claim any deductions for the putpose of calculating the offset child support amount.

Is this correct?

Issue # 2. I am on maternity leave this year. My pay is topped up for 7 mos. after that I am taking an extra 12 weeks off where I only earn EI. My new partner is then taking the final 2 mos of parental and I will return to work full pay. I estimate the drop in my income this year will be $6000.

My ex said he spoke to a lawyer and was told that since this is a temporary change it doesn't count and he does not have to pay me more support next year.

I just don't think he is right about this.

Lastly, where does this leave us if we don't agree on what our income is? I have no interest in going to FRO or Court over $100/mos or whatever the change is.

Any ideas how to resolve this with him?
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Old 07-23-2016, 02:08 PM
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I believe Line 150 is net income, and does not take into consideration deductions, those are done elsewhere. So if your salary was 40k, and your rental income was 10k, your total income for Line 150 is 50k.

Even if you had 15k in deductible expenses, Line 150 would not be reduced to reflect that.

Simplest solution though, get your taxes done professionally, and whatever shows up on that line can't really be disputed at that point.

For the maternity leave, it's only my opinion, and there's likely case law for and against it, but it's your choice to lower the income that you normally make to provide for your child. Why should he have to pay more to support you for a choice you've voluntarily taken on?

Yes, there's new expenses and time obligations on your part for the new child, but those have nothing to do with him and his situation. If you lost your job and decided to be a stay at home mother, there is still the potential to impute your former income to you, and the child support payments would be unchanged.
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Old 07-23-2016, 08:53 PM
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As I've mentioned in previous posts, Judges make so many stupid decisions that it is possible to find a precedent for almost anything.

So lets think about this logically instead of delusionally like lawyers do.

Line 150 is almost never income for child or spousal support purposes. I have fought many battles over this with my ex and actually went to trial over it. I won the battle both times.

Issue #1

No investment income in my opinion should be subject to child or spousal support. You are giving up space in your home to get rental income. It doesn't matter if you have a gain, loss or break even. It should be excluded. How would your ex feel if you had a loss for rental income for tax purposes and tried to deduct it from support payments. Exclude.

Issue #2

This is a tougher one but here would be my opinion. You have made a lifestyle choice which is temporary. He should not be punished for your lifestyle choice (to have a kid). I would say that your regular salary should be imputed to you for that year and your line 150 ignored again.

These are just my opinions and a Judge may rule differently.

Good luck in what you decide to do.
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Old 07-23-2016, 08:55 PM
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Quote:
Originally Posted by Soiled View Post
I believe Line 150 is net income, and does not take into consideration deductions, those are done elsewhere. So if your salary was 40k, and your rental income was 10k, your total income for Line 150 is 50k.

Even if you had 15k in deductible expenses, Line 150 would not be reduced to reflect that.
This is incorrect. Rental Income MINUS expenses is done before line 150. This is where form T776 comes in.

Line 150 is *critical* to income determination....
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Old 07-24-2016, 12:07 AM
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Rental Income shows up at line 160 as Gross and line 126 as the Net. Once form T776 is filled up following the instruction T4036, this statement becomes a document subject to disclosure.

Like all other self-employment income (line 162 to 170 Gross and line 135 to 143 Net) an income statement must be provided as not all the expenses are allowed to lower the income that shows at the end on line 150. This is why an income must be imputed to all self-employed worker.

Note that an expense not related to your business (sponsoring a hockey league) and an expense that do not occur a cash out of funds (depreciation) are not to be accounted. Both of you and/or your lawyers must agree on an imputed income or the judge will decide.

For the new child... this is not your ex responsibility. You need to rely on the real father of this one to take over your slack. This is your choice but if he is willing to help... good for you but he has really nothing to do with your new lifestyle. What if you ever decide to have 5 more kiddos... poor guy... he would be hooked for the rest of his lifetime!
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Old 07-24-2016, 02:48 AM
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look at it this way..if your ex had another child with someone else and took parental leave and wanted to pay less to you, how would you feel?
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Old 07-24-2016, 07:09 PM
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Your ex is wrong on both counts.

Issue 1: Advice above re: rental income is correct - certain deductions might be exempted from rental income but, for the most part, Line 150 is the fair assessment.

Issue 2: Advice above re: leave is incorrect: maternity/paternity leave is a material change of circumstances, and support would be varied. Note : Paid maternity or paternity support only -- If you choose to go beyond the standard length of paid paternity/maternity leave, then you would likely be imputed income.
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Old 07-24-2016, 07:21 PM
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Quote:
Originally Posted by mcdreamy View Post
Your ex is wrong on both counts.

Issue 1: Advice above re: rental income is correct - certain deductions might be exempted from rental income but, for the most part, Line 150 is the fair assessment.

Issue 2: Advice above re: leave is incorrect: maternity/paternity leave is a material change of circumstances, and support would be varied. Note : Paid maternity or paternity support only -- If you choose to go beyond the standard length of paid paternity/maternity leave, then you would likely be imputed income.
I believe this is correct. Line 150 is used to calculate income except in very unusual circumstances.

Parental leave is not a "lifestyle choice", so if it results in reduced income for a period, CS is adjusted correspondingly. In that respect, it's like medical leave. If you did not return to work after your parental leave ended, you might be imputed from that point onwards. Similarly, if your ex had another child and took parental leave, his CS payments to you would be reduced.
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Old 07-24-2016, 07:54 PM
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I have to jump in here again but I'll go backwards

Issue #2

As I mentioned in my prior post, this is a hard call - in fact it's such a hard call that this case went to the Court of Appeal. Here is the link. Clearly the decision could go either way.

JP Boyd on Family Law Blog by Collaborative Divorce Vancouver: Court of Appeal Releases Decision on Child Support Liability of New Parent to First Family

Issue #1

You guys have got to stop this nonsense about Line 150 being income for child/spousal support purposes. Line 150 is NEVER income for child/spousal support purposes. I have fought this issue in two trials where I said it was not income and her and her lawyer said it was. I WON both.

Rental income is clearly investment type income where you are giving up something to get income. In this case, she is giving up space in her home that she cannot use for her personal use. She should not be punished by paying support for this income. No one has an obligation to rent out part of their home. This income should definitely be excluded. I would be more than happy to fight this issue on your behalf to prove to all these guys that Line 150 is not income for child/spousal support purposes. Maybe you should talk to that woman on here who has an ex who is a doctor and his line 150 income was about 150,000. He's really earning over 500,000. I rest my case.
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Old 07-24-2016, 09:27 PM
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Thank you Desperate_Dad.

Line 150 certainly is not the end-all in calculating SS, particularly if the payor is self-employed. Also, in many cases when the payor enjoys employment with exceptional benefits, line 150 certainly isn't used.

My rule of thumb is simply this: I have no interest in how my ex manipulates his money in order to reduce the amount of income tax he has to pay... what arrangements he makes with CRA is of no concern to me.

People have to keep a very careful eye on this issue. Judges err often. In my situation one judge incorrectly combined my SS with my earned income!
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