In the Matter of Maves and Moore
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The parties were divorced in 2004 and had a son, who was fourteen years old at the time of the hearing on petitioner's motion to modify child support. As part of the property settlement in the parties' divorce, respondent was awarded Squam Lakeside Farm, Inc. (SLF), a campground consisting of 119 sites with trailer hook-ups for water, electricity, and sewer. SLF was a S-corporation; respondent was the sole shareholder. SLF's profits, losses, and capital gains were reported on respondent's personal federal income tax returns as shareholder. In 2010, respondent altered his business plan and, after expending almost $400,000 in legal bills and surveying costs and obtaining the necessary permits from the State, began marketing the campsites as condominiums, rather than as seasonal rentals. Based upon the sale of many of the condominiums, respondent reported capital gains on his 2011 personal tax return. Furthermore, respondent restructured a loan that he owed to SLF, converting it to a line of credit. Since that time, he used the line of credit for various expenses, both personal and business-related. Respondent never made any payments toward the outstanding principal or interest. In November 2011, petitioner moved to modify child support, asserting that three years had passed since the previous support order and that circumstances had materially changed, warranting a new support order. At the hearing, the parties disagreed about what comprised respondent's "gross income" for the purpose of determining child support. The trial court determined that the capital gains generated by the sale of the condominium units were "irregular" income that should be considered as part of the respondent's gross income for the purpose of establishing his child support obligation. Petitioner argued that the net profits from the sales of SLF condominium units were "gross income" for purposes of calculating child support. Respondent countered that, because several neighboring states include capital gains in the definition of "gross income," but New Hampshire did not, the legislature intended to exclude capital gains from "gross income" when calculating child support. The New Hampshire Supreme Court was not persuaded by respondent's argument that, because some states included capital gains in the definition of "gross income" the New Hampshire legislature specifically intended to exclude them. "Our task here is to interpret our child support statute, RSA chapter 458-C; the definition of "gross income" in other states' statutes does not control our analysis." The Court concluded that capital gains from SLF were "gross income" for the purpose of determining child support. Because the trial court erroneously relied upon respondent's adjusted gross income, the Court vacated and remanded for a redetermination of his child support obligation.
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