Opinion ID: 883998
Heading Depth: 2
Heading Rank: 1

Heading: Assiqnment of income to Mark from his home.

Text: In computing Mark's income for purposes of determining child support, the District Court attributed to him the equity income of his home. To do so, the District Court subtracted a homestead exemption of $40,000 from the total value of the home ($52,000), leaving Mark with $12,000 in equity in his home. The District Court then calculated the amount of interest which Mark would earn if the $12,000 were invested, and attributed this amount to Mark as income. Mark asserts that the Guidelines do not provide for attribution of income in this fashion. We agree. The Child Support Guidelines address the attribution of income to non-performing assets in Rule 46.30.1514, ARM. That Rule provides in part: Income attributed to assets is the amount of interest income which could be earned if non-performing assets are liquidated and the proceeds invested. For example, a parent may possess non-performing assets like a vacation home, idle land, hobby farm or recreational vehicles. In such cases, a child is entitled to benefit from this potential income. Rule 46.30.1514(l), ARM. Essentially, by applying the homestead exemption, the District Court considered $40,000 of the $52,000 value of the home as a performing asset. It then considered the other $12,000 of the 10 home's value as a non-performing asset to which income may be attributed. This treatment was erroneous for three reasons. First, the homestead statutes, found at 5 70-32-101, MCA, et seq. I provide that a homestead, valued up to $40,000, generally will be exempt from execution or forced sale. Section 70-32-201, MCA. However, in order to claim the exemption, the owner must file a declaration and acknowledgement of homestead in the same way that a grant of real property must be acknowledged and filed. Section 70-32-105, MCA. In this case, there is no indication that Mark has filed a homestead declaration as is required by statute, or that his home is in danger of being subject to execution or forced sale. Therefore, there is no legal basis for appl,ying the homestead exemption statutes to this child support modification case. Second, the applicable rule allows for the attribution of income which a parent might earn if non-performing assets are liquidated and the proceeds invested. Rule 46.30.1514, ARM. By attributing income to part of Mark's house, the District Court seemed to presume that some part of the home could be liquidated and the proceeds invested, while leaving the rest of the home intact. We fail to see how this can be done. Mark's house is valued at $52,000. He cannot simply remove the $12,000 which the District Court has deemed to be non-performing in order to invest it, as if some part of the house's value is severable from the rest. The house, in its entirety, is a performing asset; it is where he and his wife live and where the children live when they are with him. There is no basis for finding that the majority of 11 the home is a performing asset but that some small part of it is non-performing. Third, Mark testified that he is not the sole owner of the house in question. Apparently, his wife and his brother also have some interest in the property. This testimony was uncontroverted. Therefore, the District Court erred in attributing income from the entire value of the house without acknowledging that Mark does not in fact own the house in its entirety. In short, the District Court erred by using the homestead statutes to conclude that any part of Mark's home was a nonperforming asset.