Opinion ID: 1057970
Heading Depth: 2
Heading Rank: 1

Heading: Capital Gains

Text: Gross income as defined in the Guidelines in effect at the time of both the parties' divorce and the modification hearing included capital gains. Tenn. Comp. R. & Regs., ch. 1240-2-4-.03(3)(a) (1994). Therefore, Mr. Kesser is required to pay child support pursuant to the 21% provision on any capital gains that he has received. Mr. Kesser contends that he is obligated to pay child support on capital gains only to the extent that they exceed capital losses, which is the same method employed in the Internal Revenue Code in determining taxable income. The term capital gains as used in the Guidelines is analogous to the term used in the Internal Revenue Code. Alexander v. Alexander, 34 S.W.3d 456, 462-63 (Tenn.Ct.App.2000). While the Internal Revenue Code provides for the subtraction of capital losses from capital gains in some instances, the result is defined specifically in the Code as net short-term capital gain, net long-term capital gain, or net capital gain. 26 U.S.C. § 1222(5), (7), (11) (2000). The plain language of the Guidelines, however, refers only to capital gains and does not refer to capital losses or a net amount of capital gains. See Tenn. Comp. R. & Regs., ch. 1240-2-4-.03(3)(a) (1999); see also City of Cookeville v. Humphrey, 126 S.W.3d 897, 902 (Tenn.2004) (noting that where the language of a statute is clear and unambiguous, we must apply the statute in accordance with its plain language). Accordingly, we conclude that Mr. Kesser's capital losses should not be considered in determining child support due from his capital gains. [9]