Child Support - New Business

[Ref]

State: Fl

Dh lost his job last October and filed to modification. BM drew out the court so our final hearing is this October. In the process DH started his own business with a partner (LLC).  There has been little planning for tax or Child support.

Any advice on how to show that DH is not earning half of all the company's money? It is a new company and will need to have funds to cushion for bad months. DH's been taking modist distributions. These distributions are very close to what , based on salary.com, he would earn in the open market.

Thanks!

Ref

[4honor]

An LLC is a separate entity -- a Corporation. Just because he and a partner own half each, does not mean he will have access to half of the INCOME. That is no where near the truth, as anyone with a business can attest to.

The key is in showing the "guaranteed payments to partners" and "distributions" he is taking.  He has access to PROFIT and not to all of half, as some must be reinvested in the business to grow it and to upgrade it.

You should be working toward proving that his distributions whether paid to him or on his behalf (like health insurance premiums paid for on his - and his family's behalf) are consistent with fair market value.

[CGS]

I am in a similar income situation and our judge determined my income to be a total of all of these things: Distributions paid to me, health/dental/optical insurance premiums, retirement matching dollars, and any other non-cash benefits I receive from the company (ie: use of a company vehicle including licensing, insurance, and fuel expenses, groceries and/or meat provided --the company purchases several beef from local 4H kids each year and shares it w/ all employees, travel expenditures not for the company, etc)

The judge totaled them all up and that was my annual income for c/s purposes.

[Stirling]

Does the LLC agreement contain provisions on how the profits and losses will be distributed to each member of the LLC?

[Ref]

There are no specified provisions. All he has had were distributions. All business related expenses have been reimbursed (mileage to clients, dinners with clients, supplies, etc.)

Thanks for all your help. It makes me feel much better.

Ref