TN Dad’s Rental Income Properly Computed for Child Support
Tennessee child support case law summary on income from rental real estate from the Court of Appeals.
Jenica Deboer Hall v. Jeffrey Glen Hall – Tennessee child support income determination
The mother and father in this Tennessee divorce case were married in 2001 and divorced in 2010 after the birth of their two children, who were seven and two at the time of the divorce. The father was a chiropractor in Chattanooga, and under the terms of the divorce, the father was to retain the commercial building in which his chiropractic practice was located. The parties agreed to a permanent parenting plan under which the mother was named the primary residential parent, and the father was to pay $1,088 per month in child support. After the divorce, the mother and children moved back to Kentucky to be near her family.
In late 2011, the mother filed a petition for contempt and to modify the parenting plan. She also argued that the child support should be increased due to an increase in the father’s income. She alleged that payments from the chiropractic practice for building rent should have been included in the father’s income. The practice had not been paying the father rent on the building, as had the other tenants. Instead, the chiropractic practice was responsible for making the mortgage payment directly to the bank.
One of the witnesses at the 2013 hearing was the father’s accountant, Deborah Collins. She testified that the business had been close to failing, but she helped renegotiate the mortgage payments to the bank on the building. After hearing all of the evidence, the trial court concluded that the mortgage payments to the bank should not be included in the father’s income. Ultimately, the trial court set the father’s income at $79,535 for child support purposes. As a result, child support was set at $1,383 per month, an increase from the original award. The mother then brought an appeal to the Tennessee Court of Appeals.
On appeal, she first argued that the mortgage payments should have been included in the father’s income.
The appeals court first noted that any rental income for the building was, indeed, part of the father’s income. But after examining the evidence, particularly the accountant’s testimony, the court agreed with the lower court that these payments had been fully taken into account, since they represented both income and a business expense.
The appeals court did note, however, that the depreciation on the building might not have been handled correctly by the lower court. It also concluded that there was insufficient evidence in the record to calculate the income, with the depreciation properly considered. For that reason, it remanded the case to the lower court for a determination of this issue. The appeals court also affirmed the lower court’s denial of attorney fees to the mother.
No. E2013-01984-COA-R3-CV (Tenn. Ct. App. Aug. 14, 2014).
See original opinion for exact language. Legal citations omitted.
For more information, see Tennessee Child Support Laws. See also Miles Mason’s book available on Amazon.com Tennessee Parenting Plans and Child Support Worksheets: Building a Constructive Future for Your Family featuring actual examples of parenting plans and child support worksheets from real cases.
