Court Opinion

ID: 3718822
Source: CourtListenerOpinion
Date Created: 2016-07-06 06:50:38.045279+00
Date Added: 2024-06-11T14:10:41.572462
License: Public Domain

Since I strongly disagree with the majority's analysis and result in regard to the first assignment of error, I respectfully dissent.
The sale of personal property can generate income or not generate income, depending on the circumstances. The test for determining whether or not income is realized is not dependent upon "profit" or "gain." Income is realized when an item is sold for a price which exceeds its depreciated basis. An individual may sell an item of personal property for precisely the same price as the item's purchase price and still realize income because prior depreciation is generally recaptured at the time of sale.
The "profit" or "gain" criterion used in the majority opinion allows people who are more concerned about the size of their bank book than the welfare of their children to avoid paying the full amount contemplated by the child-support guidelines. The payor has merely to allocate personal property or even real *Page 639 
property to a business use and then depreciate the property, thereby decreasing income for the purposes of the Internal Revenue Code. The Supreme Court of Ohio has found this acceptable in Kamm v. Kamm (1993), 67 Ohio St.3d 174,616 N.E.2d 900. However, the Supreme Court of Ohio did not contemplate that the payor would be able to exclude the income permanently by shielding the depreciated amount from recapture upon sale of the depreciated asset.
Having defined "income" in a way which is at odds with the Internal Revenue Code, and therefore at odds with R.C.3113.215(A)(2), the majority proceeds to apply this erroneous definition to reverse the appropriate decision of the trial court in the present case. Mr. Geiger, who consistently referred to the sums he received from the sale of his business assets as "income" in his testimony, recalls (and declares for income tax purposes) his financial dealings in a way that is obviously self-serving. He declared gross receipts for his business of approximately $30,000 for 1991, the year in question. From this gross receipt figure, he subtracted over $14,500 in car and truck expenses. This amounts to over 53,000 miles of business travel. By the time Mr. Geiger is done deducting his business expenses, he has generated himself a tax loss of almost $10,000. Some of this loss he recouped by collecting unemployment benefits of almost $7,300. Still his total income before adjustments in 1991 was only $1,679 according to his income tax returns.
Interestingly enough, Mr. Geiger still was able to deposit $112,421.13 into his checking account in 1991 — over $70,000 more than can be detected by a review of his United States individual income tax return for 1991 and over $28,000 more than can be explained if the $42,000 from the sale of his business assets is included in the calculation. I believe that the trial court would have been well within its discretion to have included the unexplained $70,000 plus in Mr. Geiger's income, not just the $42,000 he admitted was income at the hearing and which the trial court and referee included as income in accord with his admission.
In sum, I believe that the trial court was well within its discretion in reaching its result and that the first assignment of error should be overruled. *Page 640