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Will S-corp gross income being used to pay credit debt of past operating expenses be treated as income for child support calc?

San Francisco, CA |

I understand that the gross income my California S-corp (sole owner) receives minus legitimate operating expenses is used to calculate child support.

My ex-wife just went unemployed and is now requesting child support.

Right now, 90% of the S-corp's gross income is used to pay off substantial corporate credit card debt that accumulated from financing 2012 operating expenses to avoid corporate bankruptcy today. The corporation has no other current operating expenses other than debt payments for past expenses. I am taking no income from the corporation.

Under California child support guidelines, will this S-corp gross income and how it is being used to pay debt for past operating expenses be treated as income or operating expense today?

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Attorney answers 1


The answer will probably depend on a CPA opinion as to the deductiblity of the debt and the nature of the circumstances. This is a highly unusual circumstance and it may be necessary for an attorney to research case precedents to provide reliable advice.

The above is general information only. It should not be considered as legal advice applicable to your specific circumstance. Reliable legal advice applicable to your situation cannot be given without a consultation. The above response does not create an attorney client relationship nor should it be considered as a privileged attorney client communication.