Court Opinion

ID: 6768510
Source: CourtListenerOpinion
Date Created: 2022-07-21 00:40:31.141217+00
Date Added: 2024-06-11T16:02:42.470302
License: Public Domain

Douglas, J.,
dissenting. Today’s majority opinion permits a self-employed parent to circumvent and/or avoid his child-support obligation by investing in the parent’s own business. The majority permits this even though the investment is for a depreciable capital asset such as a tractor (farm equipment herein), additional land or buildings to house the business, or even leasehold improvements. The majority arrives at this result by making such investments “ordinary and necessary expenses” which are then deductible against gross receipts (income) which are used to calculate a divorced parent’s child-support obligations. In my judgment, this allows such a parent to accumulate assets, take tax deductions, and still have the child-support obligation reduced or totally extinguished. This is unwise and unfair and is not supported by the intent of the child-support-guidelines legislation.
It is presumed, I imagine, that such investments will increase the future profits of the business, thereby resulting in an increase in the obligor’s future child-*179support obligation. For several reasons, such an assumption is constructed on a very shaky foundation.
In Marker v. Grimm (1992), 65 Ohio St.3d 139, 601 N.E.2d 496, we examined the legislative purpose of R.C. 3113.215. We found that the “best interest of the child” is the overriding concern of the law. Under no set of circumstances can today’s opinion be interpreted as consistent -with the intent of R.C. 3113.215 as explained in Marker. All the majority opinion does is benefit self-employed parent-obligors at the expense of their children. Several examples will suffice.
If a divorce occurs and a child (children) of the marriage is near the age of majority (say fifteen years of age), the self-employed obligor parent can avoid making any support payments at all simply by acquiring, for cash, in each of the years of obligation, a capital asset that becomes an “ordinary and necessary” business expense for purposes of an R.C. 3113.215 calculation. This is also so— and even worse — if the acquisition is made out of retained earnings or as a result of loan proceeds. In each of the examples above, application of the majority opinion gives the support obligor the right to reduce the support obligation and to deduct, by way of depreciation for federal income tax purposes, the amount of the expenditure. This is double dipping at its finest.
Rather than the law set forth in the majority opinion, I believe that the syllabus of our opinion should read:
“1. ‘Ordinary and necessary expenses’ incurred by a self-employed child-support obligor in generating self-employment income are deductible against such obligor’s gross receipts (revenue) for the purpose of computing, in accordance with R.C. 3113.215, the obligor’s child-support obligation.
“2. Acquisition of a depreciable capital asset is not a deductible ‘ordinary and necessary expense’ as defined in R.C. 3113.215(A)(4), for purposes of computing child-support obligations.”
Since the foregoing is not acceptable to a majority of this court, the very least we should adopt as a rule is that the acquisition of a capital asset by a self-employed child-support obligor must, to be an ordinary and necessary business expense, be acquired out of actual and current cash flow. Such a rule would reduce the incentive to invest in capital assets in order to reduce or extinguish child-support obligations.
If a child is to be deprived of support through such maneuvering, then such a rule would, at least, require an obligor to spend the obligor’s money on capital-asset acquisition.
Since the majority’s opinion is contrary to the “best interests of the child,” is violative of the intent of R.C. 3113.215, and defies basic economic and accounting principles, I must respectfully dissent. I would follow the conflict case of *180Campbell v. Kodish (Mar. 5, 1992), Cuyahoga App. No. 62338, unreported, 1992 WL 41864.
F.E. Sweeney, J., concurs in the foregoing dissenting opinion.