"To the extent then that plaintiff's argument can be understood for the proposition that retained earnings can never be deemed an income source for purposes of the Guidelines calculations, we disagree. Rather, the appropriate analysis includes a focus on the legitimate need of the corporation to retain income, and whether the company retained excessive earnings which could otherwise have been disbursed to the supporting parent as income, thus enabling him or her to pay increased child support."
see : http://www.judiciary.state.nj.us/opinions/a0176-12.pdf
Charles Abut Esq.
Hackensack NJ
(201)342-0404
Original Message:
Sent: 03-17-2014 07:59
From: Faith Ullmann
Subject: K-1 Partnership Income and Child Support Calculations
My client is a 50% Partner in a Business and receives a K-1 each year. When determining "gross" earned income for my client, for purposes of calculating child support, do I use Line 1 of the K-1, "Ordinary Business Income", or Line 19, "Distributions"? My client had Distributions in excess of his Ordinary Business income, in 2013 which reduced his capital account. Although the reduction in his capital account was not significant, I want to use the correct "income" for child support.
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Faith Ullmann Esq.
Newton NJ
(973)579-9700
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