What is Imputed Income and How Does it Relate to Spousal Support?
Full Question:
Answer:
The imputed income rule is an attempt to protect the child, keep children and mothers off welfare or help compensate the state for welfare parents, and protect the court against manipulation. One can impute income when it comes to spousal support. "Imputing income" arises when one’s earnings have diminished substantially, while one’s "earning capacity" remains unchanged.
For example: if someone quit his job as a banker and worked in a coffee shop, his or her earnings would diminish substantially. A judge could use the banker's earning capacity to determine the support award, if it appeared that he or she deliberately quit his or her job and lowered his or her income. Keep in mind that this lowering of income does not have to be for the specific purpose of avoiding support.
Imputed income is also a term the Internal Revenue Service (IRS) applies when they feel that the value of a benefit or service should be considered as income for the purposes of calculating your federal taxes. For example, if you have a contract with the other owners requiring them to pay a share of the expenses and you forgive their indebtedness, it may be counted as imputed income on the other owners' taxes as a cancelled debt. The answer will depend on all the circumstances involved. I suggest you consult your accountant who can review all the facts and documents in your situation.
Please see the information at the following link:
http://www.irs.gov/taxtopics/tc431.html
The courts in the State of California may award support to either spouse, without regard to marital misconduct. The goal in awarding spousal support is to help the spouse receiving alimony to become self-supporting within a reasonable time. Generally, the courts consider one-half the length of the marriage to be a reasonable time for a spouse to become self-supporting. Factors the court will consider in determining the length and amount of an award of spousal support include:
1. The marketable skills of the supported spouse;
2. The extent to which the supported spouse’s present or future earning capacity has been impaired due to duties of the marriage;
3. The extent that the supported spouse contributed to the earning capacity of the supporting spouse;
4. The ability of the supporting spouse to pay;
5. The needs of each party;
6. The obligations and assets of each party;
7. The duration of the marriage;
8. The age and health of the parties;
9. Any other factors the court deems are equitable and just.
