In a recent family law matter, Arxis Financial, Inc. was retained by a spouse to establish her ex-husband’s income because he had petitioned the court for termination of spousal support. The husband claimed negative income (loss) of over $15,000 per month, while the wife claimed (based on our work) that husband’s income was over $11,000 per month, a difference of over $26,000 per month ($192,000 per year).
The difficulty in this case came from the fact that we were dealing with an S corporation. The husband is a shareholder and works for the business. Arxis Financial, Inc. showed total income that included salary plus cash distributions from the S corporation. The opposing expert showed total income (loss in this case) that included salary minus losses reported on the K-1. The only difference between the expert’s opinion was how the cash distributions from the S corporation should be handled.
The cross-examination was vigorous. It allowed Arxis to establish that our position in this case not necessarily applicable to every S corporation. Analysis of income from an S corporation is a facts-and-circumstances analysis.
Result: The court rejected the husband’s request to eliminate or reduce monthly spousal support. The court also indicated that, had the request been made, the evidence supported an increase in monthly support. (click here for further details on this case)