Depreciation Deductions and Spousal Support California

How Do Depreciation Deductions Enter into Child or Spousal Support?

If you own a business or a rental property, you are probably used to taking depreciation deductions against your annual income on your federal and California state tax returns. These depreciation deductions lower your income for tax purposes.

When calculating your income to determine the child or spousal support you’ll pay, however, California family courts do not allow depreciation deductions. Instead, business or real estate depreciation deductions are added back into your income. That’s because, in the eyes of the court, claiming a depreciation deduction on your income tax returns does not reduce the amount of actual cash you may have available to pay child or spousal support.

What is taken into consideration?

As we’ve mentioned in a previous blog post, How Is Child Support in California Calculated?, a parent’s first and principal obligation is to support his or her minor children according to the parent’s circumstances and station in life. Child support is based on each parent’s net disposable monthly income and the amount of time the child will be cared for by each parent. The court considers each parent’s income from all sources, whether or not it is reported or taxed under federal and state law.

Spousal support may be awarded by the court to help equalize the financial resources of the divorcing couple. In determining the amount of support to award, the court will assess the lower income spouse’s needs and the other spouse’s ability to pay.

You may be able to lower your child or spousal support payments

Even though the court won’t allow you to deduct property or business depreciation from your income when calculating child or spousal support, there may be other perfectly legal things you can do to lower your support payments, especially if you are a high net worth individual, or if you are self-employed. Support calculations are complex, and California family courts have considerable amount of discretion in their decisions.

Contact me for assistance

If you want to know if you are paying the appropriate amount of child or spousal support and you live in the San Francisco Bay Area, please contact my office for a consultation. As an experienced divorce attorney with a Master of Laws in Taxation, I understand the intricacies of how support payments are calculated.

Attorney Christina Sherman is a Marin County CA family law attorney and Certified Family Law Specialist, specializing in divorce, child custody and support, marital contracts and other family law issues.

Disclaimer: Law Office of Christina Sherman publishes articles about family law cases on its website for informational purposes only. The information contained herein may not reflect the current law in your jurisdiction. No information contained in this post should be construed as legal advice from Law Office of Christina Sherman or the individual author. This general information is not a substitute for legal advice on any subject matter. For advice pertaining to your specific case, please contact our office to schedule a consultation. No reader of this article should act or refrain from acting on the basis of any information included in, or accessible through, this article without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country or other appropriate licensing jurisdiction. Using this information or sending electronic mail to Law Office of Christina Sherman or its attorneys does not create an attorney-client relationship. Any statements pertaining to past results do not guarantee future results.