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Steven  K.
Steven K., Family Law Attorney
Category: Family Law
Satisfied Customers: 2332
Experience:  I have practiced family law since 1996, focusing on child custody and domestic violence
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I am allowed to make no more than $30,000 before I lose my

Customer Question

I am allowed to make no more than $30,000 before I lose my $48,000 year alimony.
If I sell my house for a $100,000 profit will that affect me losing my alimony?
My divorce Decree states -
"The parties agree that neither an increase in the Husband's income to $175,000 per year nor an increase in the wife's income to $30,000 per year shall be regarded as a substantial change in circumstances sufficient to give rise to an application by either party for an increase or decrease in the alimony obligations provided in this agreement."
I have a mentally disabled son who has Schizophrenia. Can I create a trust and put the house in his name to leave to him? If so, can I sell the house and buy another that I will leave to him? Will this affect his Social Security?
Submitted: 8 months ago.
Category: Family Law
Customer: replied 8 months ago.
I own the house free and clear. It cost about $190,000 and I'll have put in about $100,000 and it would sell for about $400,000.
I would want to buy a more expensive house for about $350,000 and pay cash and leave the rest in my bank account (CMA).
So I need to know if I would lose my alimony based on the profit. I will have owned it 1 or 2 years before selling it.
That would be just for that time. Its not like a job that is steady income.
Expert:  Steven K. replied 8 months ago.

There is no clear cut answer to this because that would require a definition for the word "income" as used in your order, and only the judge who ordered it knows what s/he meant by it. Here, it sounds as though your order was a product of an agreement, not a contested order, so it sounds like there is no set answser as to what was intended by "income." However, there are strong arguments in support of your position that the profits from the house should not make you loswe your alimony.

First, note that increasing your income to $30,000 does not automatically eliminate your alimony. It only lets your ex apply to the court for a modification which will not automatically be granted. He would have to convince the court that you no longer have a need for alimony because of the increased income, or that you need less alimony, and the amount should be lowered. This would be a weak argument because this is not recurring income, it is one time income in the form of capital gains. So even if it decreased your need one year, it would not necessarily decrease your need in the following years.

But it is unclear that such a capital gain would decrease your need if you used the proceeds to buy a new house with the proceeds. It does not sound like gifting the house to your son in trust would create any problems, and in that case, the sale of the house would result in restricted funds that you could not draw on for personal reasons. Your income would not, therefore, increase, and would not be a basis for modification of the order for alimony. However, you would want to hire a skilled trust/estate/probate attorney to help you create the trust.

Expert:  Steven K. replied 8 months ago.

I wish I could be more definitive, but I hope this is helpful, nonetheless.

Customer: replied 8 months ago.
Thank you. My ex husband knows that I wish to "flip houses" as I have been an interior designer in the past, though I am not able to practice since I care for our disabled son. So, I will be continuing to do this every few years (1-2) to increase my cash flow. Could he then prove (maybe not with the first house sell but after the second or third) that this is income?
Expert:  Steven K. replied 8 months ago.

Actually, I think that is highly likely, especially if that is your primary source of income.

Customer: replied 8 months ago.
Thank you. ***** ask another question about if my CMA account which is gaining money as it is in stocks will affect this alimony? Or is that a separate question?
Customer: replied 8 months ago.
The problem with the "house flipping" as income is - It is not reliable and I could also lose money on a house so I would need to alimony for basic expenses some years.
Expert:  Steven K. replied 8 months ago.

You don't need to ask that separately, but the court is likely to look at the same things as with the sale of the house:

1) Is this income or is it just an asset that has increased in value? (Consider whether the increase will be taxed as taxable income)

2) Is this recurring income or one time income?

Of course, if you lost money on a house flip, this would reduce your overall income for that year. That might convince the court not to consider a profit in another year as regular income.

Customer: replied 8 months ago.
Well, that's a good question. Not to confuse matters but -
First of all, $60,000 of that CMA money was borrowed from my life insurance policy. It is doing very well very quickly in
the stocks I put it in. I will spend most of it fixing the house up and leave the rest in the stocks or purchase some things
for myself.
Q - Is the $60,000 taxable? Are the gains (which at this rate may double the $60,000 in a few months time) taxable?Also - Are money market funds and stocks in my IRA which are growing quickly also taxable?
Expert:  Steven K. replied 8 months ago.

For that you would have to ask an accountant or a tax attorney.

Customer: replied 8 months ago.
I thought so. Would I be able to request one here?
Expert:  Steven K. replied 8 months ago.

We do have tax experts. They are listed under tax, not under legal.

Customer: replied 8 months ago.
Thank You for your expertise and time :-)
Expert:  Steven K. replied 8 months ago.

You're welcome! If you have no further questions, I'd appreciate if you would rate my response so I may get credit for my work. Thank you!

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