Rental Income is Income Available for Support

Often in San Diego divorces, both spouses are unable to maintain the same lifestyle they enjoyed while living together. The lifestyle of the parties during marriage is called the marital standard of living. The financial reality of divorce is that it is more expensive to sustain two separate households than it is to sustain one. Thus, divorce can lead to an adjustment in spending, entertainment and square footage.

Spousal support is a tool used by Family Courts to attempt to equalize the living situation of both spouses. This is especially true if one spouse forgoes the opportunity to work for many years in order to take care of his or her children. If one spouse is the breadwinner and the other maintains the home and the children, upon divorce, the breadwinner will be able to support the same lifestyle but this would leave the non-working spouse with no ability to support him or herself and the children. Thus, the court will order the breadwinner to pay support to the non-working spouse in order for both to maintain similar standards of living post-separation.

Spousal support is calculated, on a temporary basis, using a guideline formula. The formula requires lawyers and judges to input both spouses “income” that is available for support. For a W-2 employee, this calculation is basic. The only factor to consider when determining income available for support is the gross wages from the spouse’s tax return or year-end form W-2. Some spouses however, have attempted to artificially deflate this income available for support by taking a reduction in salary and instead receiving housing or car allowance perks from their employer. If the court recognizes an attempt to artificially deflate income, it may impute the value of perks received by the spouse as additional income available for support.

As stated above, both spouses will likely not be able to maintain the same standard of living they both enjoyed together during marriage. One way to relive some financial burden is for a spouse to allow a roommate to move in with him or her. With the extra financial contributions of a roommate, the spouse will be able to afford a larger and/or nicer residence. According to Family Code section 4058, gross income available for support is defined as “income from whatever source derived.” In County of Orange v. Smith, the court interpreted this code section to include rental income paid by a roommate. Thus, rental income paid by a roommate is properly considered as income available for support.

Please contact us if you are considering a divorce from your spouse, a legal separation, or have questions regarding child custody and visitation. Nancy J. Bickford is the only lawyer in San Diego County representing clients in divorces, who is a Certified Family Law Specialist (CFLS) and who is actively licensed as a Certified Public Accountant (CPA). Don’t settle for less when determining your rights. Call 858-793-8884 in Del Mar, Carmel Valley, North County or San Diego.

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