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What is unrealized income in determining child support?

When child support is determined, it is typically considered an income driven calculation. A support order is based on the difference between the incomes of the custodial parent and noncustodial parent. Determining this amount is usually a task left to the family court and child support agency. When calculating the incomes of each parent to determine child support, many different sources of money can be considered income: realized income, which is money that has been received, and unrealized income, which is money that may be received in the future.

Child support guidelines try to define income with a very precise definition. This helps the family court make as accurate a calculation as possible. In order to better serve parents, the family court may take into account certain unrealized income when ordering child support. These sources typically exist only on paper and have not been received as income yet. Although child support is calculated similarly from state to state, each individual state may recognize unrealized income differently.

In some states interest earned on an IRA may be considered income. Even though this interest may not yet be withdrawn by the recipient, certain cases have allowed the reinvestment of this interest to be considered income. Likewise, income from a trust, regardless of if it has been received, can also be considered income. Certain stock option gains, whether exercised or not, may also be considered income. And, of course, capital gains from stock transactions, like any income reported to the IRS, may also be used in some cases when calculating child support.

Although calculating child support may seem like a relatively simple process, certain aspects, such as unrealized income, may make an accurate calculation more difficult. Individuals concerned with how unrealized income may affect their child support could benefit by speaking with a family law attorney.

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