Haefele v. Haefele

Father and Mother were divorced pursuant to a judgment and decree which provided that Father pay child support to Mother. Father later moved to modify his child-support obligation, arguing that certain distributions paid to Mother as a shareholder of a closely-held subchapter S corporation should be included in her gross income, as defined by Minn. Stat. 518A.29(a) and 518A.30 for the purpose of calculating the child-support amount. The district court granted the motion. The court of appeals reversed, determining that because the distributions either were not available to Mother or were designated to pay her income tax obligation, the distributions did not constitute gross income within the meaning of the statutes. The Supreme Court reversed, holding that gross income from a shareholder's interest in a closely-held subchapter S corporation must be calculated using the statutory formula in section 518A.30 and does not depend on the amount actually distributed or available to the parent shareholder. Remanded. View "Haefele v. Haefele" on Justia Law