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Rental properties also raise child support issues

A previous post here discussed how those who own rental properties can face complicated property division issues in the event of a divorce or separation. Rockford residents who own rental properties, whether they are going through a divorce or have never been married, should also be aware that their income from these properties may affect child support calculations.

Under the Illinois Child Support Guidelines, people who get income from rental properties will be expected to devote a portion of that income to the support of their children. Calculating what exactly this income is can be difficult.

While the starting point of the calculation will be the rent payments the landlord receives, the court must consider net income. This means that the person expected to pay support from rental income can deduct business expenses, like repair costs and mortgage payments, for example. These expenses must be reasonable and appropriately related to the business.

Figuring net income from a rental property business is not always a matter of looking at tax returns. A court has discretion to ignore certain items that are deductible on taxes, including things like depreciation. On the flip side, certain benefits of owning a business, like being able to write off a portion of meals for instance, can get pulled back into the pot when it comes to calculating child support. In short, going through a child support calculation when either parent owns rental properties will likely involve a thorough investigation, including an examination of receipts and accounting records.

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Law Office of Bradley R. Tengler, P.C. 728 North Court Street, Suite B Rockford, IL 61103 Phone: 815-981-4859 Fax: 815-997-5129 Rockford Law Office Map