Opinion ID: 2543667
Heading Depth: 1
Heading Rank: 5

Heading: Distributions

Text: When a distribution is made, courts differ on the amount to be considered for purposes of support. Some courts base support obligations upon the amount of income actually distributed ... rather than upon the higher gross amount of ... income upon which [the parent] was required to pay federal income taxes. Mitts, 39 S.W.3d at 148-49 (Tenn. App.). In Mitts, the husband was a minority shareholder of a Subchapter S corporation who had previously been employed by the corporation. After the termination of his employment, he began to receive income distributions in an amount equal to his former salary. The husband's income for support purposes was determined to be the amount he received in distributions and not the amount reported as gross earnings taxed. 39 S.W.3d at 148 (Tenn. App.). Other jurisdictions, such as Oregon, operate under a blanket rule that when a corporation attributes undistributed income to a minority shareholder for income tax purposes, that amount is presumptively available to the shareholder for calculating child support. Perlenfein v. Perlenfein, 316 Or. 16, 18, 25-26, 848 P.2d 604 (1993). A parent must then present evidence that the gross income as calculated is not actually available. 316 Or. at 25. It should be noted, however, that Oregon state regulations, unlike the Kansas Guidelines, do not indicate that corporate income must be received in order to be considered. See Perlenfein, 316 Or. at 23-24; 1998 Kansas Child Support Guidelines § II. D. Kansas rules for determining support provide that historical information should be considered when determining when regular income is received for purposes of calculating domestic gross income under the guidelines. See 1998 Kansas Child Support Guidelines § II. D. The historical information regarding respondent's interests supports the district court's conclusion that the amounts distributed to respondent were for the sole purpose of paying his share of the corporation's taxes and were not available to pay support. See McHugh, 702 So.2d at 642 (Fla.).