Case Name: Judy K. STRUCK, Plaintiff and Appellee v. James L. STRUCK, Defendant and Appellant
Court: South Dakota Supreme Court
Jurisdiction: South Dakota
Decision Date: 1987-12-23
Citations: 417 N.W.2d 382
Docket Number: No. 15583
Parties: Judy K. STRUCK, Plaintiff and Appellee v. James L. STRUCK, Defendant and Appellant.
Judges: MORGAN, J., concurs specially.
Reporter: North Western Reporter 2d
Volume: 417
Pages: 382–385

Head Matter:
Judy K. STRUCK, Plaintiff and Appellee v. James L. STRUCK, Defendant and Appellant.
No. 15583.
Supreme Court of South Dakota.
Considered on Briefs May 21, 1987.
Decided Dec. 23, 1987.
Daniel J. Nichols of Craig & Nichols, Sioux Falls, for plaintiff and appellee.
David R. Gienapp of Arneson, Issenhuth and Gienapp, Madison, for defendant and appellant. .

Opinion:
WUEST, Chief Justice.
This is an appeal from an order entered by the trial court concerning post-divorce matters. We reverse.
The original divorce action incorporated a property settlement and child custody agreement. The original judgment and decree was entered on December 7, 1984. Thereafter, Judy Struck (Appellee and custodial parent) brought an order to show cause to increase child support pursuant to SDCL 25-7-7. In addition to the request for increased child support, the order to show cause requested a change from the original judgment and decree so as to allow her to claim all three of the minor children as exemptions on her federal income tax return. The original decree provided James Struck (Appellant) would be allowed to claim two of the minor children.
A hearing was held and the court entered an order on October 3, 1986, which increased child support from $350.00 to $525.00 per month. When reminded by appellee's counsel he had not ruled on the exemption issue, Judge Heege wrote a letter saying: "[I]n accordance with the philosophy of the current revenue laws, I believe the custodial parent should be entitled to claim the dependency exemption for children and I will enter an order to that effect ." The order was entered October 8, 1986. Appellant challenges that order.
As the trial court correctly noted, generally, the dependency exemption for children of divorced taxpayers will go to the parent having custody of the child for the greater part of the calendar year. 26 U.S.C.A. § 152(e)(1) (West 1984 & Supp. 1987); 26 U.S.C.A. § 152(e)(1) (West Special Pamphlet, Tax Reform Act of 1986). There are, however, three exceptions to the general rule. One exception arises when a pre-1985 divorce decree or separation agreement between the parents grants the exemption to the noncustodial parent and the noncustodial parent provides at least $600.00 for the support of the child for the year in question. 26 U.S.C.A. § 152(e)(2)(A) (West 1984 & Supp.1987); 26 U.S.C.A. § 152(e)(3), (4) (West Special Pamphlet, Tax Reform Act of 1986). See also, former 26 U.S.C.A. § 152(e)(2)(A) (West 1984); 1987 U.S. Master Tax Guide (CCH) paragraph 154A; 1 Federal Tax Guide 1987 (P-H) paragraph 9253; 2 Federal Tax Guide 1987 (P-H) paragraph 53, 786; R.W. McGee, Tax Planning In Divorce Settlements (P-H 1985). The record reveals that appellant received the right to the exemptions in the original pre-1985 decree and had been paying about $4,500.00 in yearly child support for three children. Thus, appellant fits the exception.
We believe the trial court erred in relying on the general rule as to dependency exemptions. Therefore, we reverse the order reallocating the exemptions.
Judy has filed a separate motion for attorney fees and costs. It is verified and itemized as required by Malcolm v. Malcolm, 365 N.W.2d 863 (S.D.1985). In determining whether one party should be required to pay the other, in this type of case, we consider the property owned by each party, the relative incomes, the liquidity of the assets and whether either party unreasonably increased the time spent on the case. Storm v. Storm, 400 N.W.2d 457 (S.D.1987). Considering those factors, we award Judy $474.80 in suit money which consists of $350.00 attorney fees, $45.00 for sales tax on fees, and $79.80 for copying appellee's briefs and affidavit in support of suit money.
MORGAN, J., concurs specially.
HENDERSON, J., specially concurs in part and dissents in part.
MILLER, J., concurs in result in part and dissents in part.
SABERS, J., dissents.