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Imputed Income in Matrimonial Actions
In his Law and the Family column, Joel Brandes discusses the requirements for a maintenance or child support award based on imputed income.
February 23, 2022 at 12:00 PM
14 minute read
The term "imputed income" is an income tax concept. "Imputed income" has been defined as "the benefit one receives from the use of one's own property, the performance of one's services, or the consumption of self-produced goods and services." (Black's Law Dictionary (11th ed. 2019)). The "imputed income" doctrine was first applied by the Court of Appeals in calculating maintenance awards in Kay v. Kay and Hickland v. Hickland. Since that time, it has been extended by statute to child support awards and the case law dealing with imputed income is equally applicable to both types of cases.
In Kay v. Kay, 37 N.Y.2d 632 (1975), the husband, a salesman, owned real estate and securities estimated at almost a million dollars, two-thirds of it in IBM stock, from which he derived an income of $10,000. Most of his real estate investments were financed by the IBM stock. He testified that his gross income was $67,000 and his net income was $28,000 per year after taxes. He gave a confusing explanation for the difference saying it was spent for business needs. His evidence was ambiguous as to $13,000 listed as a business expense for tax purposes but described by the husband as necessary "gratuities" in connection with his job.
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