Is rental income included in a support calculation?
/Rental income where the income only covers the property expenses generally would not be included in a support calculation.
This is because the “cash flow” is the amount received in rent less what is being paid out, which includes mortgage principal and interest, taxes, insurance, and repairs among other real costs that equals the net income for support purposes before tax. Only the net income is considered as part of income.
What we recommend is to go to the rental property schedule of the tax return and add back the depreciation and subtract principal paid down not he mortgaged since only the interest part of the mortgage payment is an allowable deduction for the IRS. Only if a party had remaining income AFTER paying the mortgage and such, that would be included in the support calculation.
Contact amanda@gordonfamilylaw.com to speak about your specific child support issues.