Find Legal Information

FOURTH DIVISION
DECEMBER 31, 2003

1-02-3785

Respondent, Mark Rogers (Mark), appeals from the circuitcourt's judgment in a post-dissolution of marriage proceeding,wherein his monthly child support payment was increased from $250to $1,000 per month. The court found Mark "receives $46,000 peryear in gifts and loans from his parents and earns $15,000 per yearand has a gross income of $61,000 for which [he] has little or notax liability." No report of proceedings or reference to anyrecord documentation is set forth in explanation or support ofthese conclusions.

On appeal, Mark questions only whether the circuit court erredin failing to deduct $46,000 in "gifts and loans" from his annualincome in calculating child support. He maintains that this courtmust determine whether the term "net income," as employed in theIllinois Marriage and Dissolution of Marriage Act (750 ILCS 5/101et seq. (West 2000)) (IMDMA), includes "gifts and loans." Petitioner, Joan Rodgers (Joan), pro se, responds that Mark "simplyattempted to characterize the largest portion of his annual incomeas gifts and loans" to lessen his child support obligation. Joanasserts that the court's characterization of the funds as "giftsand loans" is inaccurate.

This case involves questions of fact and law. Therefore, itmust first be determined if the circuit court improperlycharacterized the money as it did. It is possible that the court's factual determinations were based on the testimonialevidence presented or documentary evidence, or perhaps, both;however, the record is barren of any evidence that might serveeither to support or to disturb the court's findings. This courtwill not speculate in ascertaining the form in which the money wasgiven, whether it was given regularly, or whether it will bereceived or terminated in the future. In the absence of asufficiently complete record on appeal it will be presumed that thecourt's order had a sufficient factual basis. Foutch v. O'Bryant,99 Ill. 2d 389, 391-92, 459 N.E.2d 958 (1984). Where, as here, therecord does not support an alternate finding, the circuit courtcannot be said to have abused its discretion in characterizing$46,000 of Mark's income as gifts and loans.

The remaining issue is whether the court erred in prohibitingMark from deducting gifts and loans from his gross income, aquestion of law and reviewed de novo. Gay v. Dunlap, 279 Ill. App.3d 140, 145, 664 N.E.2d 88 (1996) (Gay). Regarding gifts, Markrelies exclusively on In re Marriage of Harmon, 210 Ill. App. 3d92, 568 N.E.2d 948 (1991) (Harmon), where the court held that a$10,000 annual gift from respondent's mother to be deductible fromgross income. This holding was based on the court's uncertaintythat the gift would be received in the future. Harmon, 210 Ill.App. 3d at 95. Absent this contingency, the exclusion of giftsfrom net income lacks clear support in IMDMA.

Under IMDMA, child support awards are a direct function of netincome, the calculation of which is a straightforward, mechanicalprocess, explicitly set forth in section 505(a)(3) of IMDMA (Peoplev. Boland, 308 Ill. App. 3d 1063, 1067, 721 N.E.2d 815 (1999)(Boland)), where "net income" is to be considered as the total of"all income from all sources," minus delineated deductions. See750 ILCS 5/505(a)(3) (West 2000). There is a rebuttablepresumption that all income, unless specifically excluded, isincome for child support purposes. Jennings v. White, 286 Ill.App. 3d 213, 218, 675 N.E.2d 985 (1997). Although gifts may bededucted from income for purposes of taxation, the circuit courtmust use IMDMA's definition of "net income," not a definition fromthe Internal Revenue Code. Boland, 308 Ill. App. 3d at 1067;People v. Davis, 287 Ill. App. 3d 846, 852, 679 N.E.2d 110 (1997)(Davis).

Subsection 5/505(a)(3)(h) of IMDMA makes deductible"reasonable expenditures for the benefit of the child and the otherparent, exclusive of gifts." The phrase, "exclusive of gifts,"references solely the clause, "reasonable expenditures for thebenefit of the child and other parent." The word "gifts" refers tothose given to the child or custodial parent, and are non-deductible. IMDMA does not, however, permit the deduction of giftsreceived as unearned income. This construction is consistent withthe axiom that where the language of a statute is clear, the courtmust give it effect. Gay, 279 Ill. App. 3d at 147.⁽¹⁾

Turning to whether loans may be deducted under IMDMA, thestatute allows for the deduction of "[e]xpenditures for repaymentof debts that represent reasonable and necessary expenses for theproduction of income." Respondent's reliance upon Consolidated-Hammer Dog Plate & Filne Co. v. CIR, 317 F. 2d 829 (7th Cir. 1963),for the assertion that the proceeds of a loan do not constitutetaxable income, is without merit. IMDMA's definition of "netincome" for child support purposes must be applied; not the taxcode. Boland, 308 Ill. App. 3d at 1067; Davis, 287 Ill. App. 3d at852. Respondent provides no authority for his contention thatloans may be excluded from child support; indeed, his positiondirectly contradicts the language of IMDMA, which provides only forthe deduction of "expenditures for repayment of debt," not theproceeds. The record presented in this appeal is devoid of anyevidence relating to "expenditures for repayment of debt."

Accordingly, loans and gifts are to be considered incalculating child support payments. The circuit court did notcommit error by not deducting Mark's unearned annual income.

For the reasons set forth above, the judgment of the circuitcourt is affirmed.

Affirmed.

GREIMAN and THEIS, JJ., concur.

1. In a recent case, People v. Bowlby, 338 Ill. App. 3d 720,730, 789 N.E.2d 366 (2003), the court, citing Harmon, seeminglydisregarded IMDMA's language in noting respondent "fails to citeauthority to support the proposition that gifts are to beconsidered when a court determines net income for child supportpurposes."