Imputing Income Based Upon Gifts
According to New York law, a Court has the discretion to impute income to a parent where the parent received money, goods or services from a relative or friend. For example, a Court may impute income to a party based on the value of a rent-free home provided for him by a relative.
A common scenario in the world of divorce law is that after the parties separate one party goes and lives with a friend or relative while they are looking for a new place to live. This really is not what this rule is designed to address. My practical experience on this point is that if this clearly is a transitory situation, a court is not going to impute any income. However, where this is a permanent arrangement, courts will consider it.
For example, a client’s spouse went to live with his sister when he was removed from the marital residence pursuant to an Order of Protection. When we went to Family Court for support the next month, there was no discussion of imputing income for his rent-free accommodations. He said that he was looking for a place to live and had not yet found one. A year later when were ready to start the divorce trial and he still was living at his sister’s place. He had no evidence that he paid her anything for rent. At that time we were able to impute some income to him for the rent-free accommodations.
In another case, my client’s husband lived in a house owned by his parents. His parents lived next door in another free standing dwelling. He paid his parents no rent, although he paid the real property taxes and home owners insurance on the house in which he lived. These totaled around $3600 per year. We showed that a comparable house would rent for about $1400 per month based upon a number of published sources including print and on-line advertisements for rental homes and apartments. We were able to convince the Judge that the husband therefore received the benefit of $1100 per month of free housing from his parents. This figure then was added into his income for the purposes of calculating child support.