DUNCAN, J.
The trial court entered a judgment that increased father's monthly child support obligation. The court based the increase on what it determined was an increase in father's gross income. Father appeals, assigning error to two aspects of the court's calculation of his gross income. First, father assigns error to the court's inclusion of a $75,000 inheritance in his gross income. Second, father assigns error to the court's use of father's average income from 2004 to 2007 to determine his gross income in 2007. On de novo review, ORS 19.415(3) (2007),
We begin with the relevant facts. Father and mother were married in 1980 and have one child, born in 1993. Their marriage was dissolved in 1998. The trial court ordered father to pay child support. Father receives income from his photography business and rental properties.
In 2007, father received a $75,000 cash inheritance. He used the full amount to pay down a loan that he and his domestic partner had obtained, in anticipation of the inheritance, to consolidate their debts, some of which were incurred as they built a home. The home, among other things, served as collateral for the loan. Father's payment of the inheritance toward the loan was a condition of the loan.
Shortly after father received the inheritance, the Douglas County District Attorney's Office moved to increase father's child support obligation. After a hearing, an administrative law judge increased father's child support obligation from $181 to $907 per month. Father appealed to the circuit court, which reviewed the case de novo pursuant to ORS 416.427(6). The court found father's monthly gross income to be $5,822 and entered a supplemental judgment requiring father to pay $633 per month in child support. The court based the $5,822 figure on father's income from the inheritance, $2,083, and from his business and rental properties, $3,739. The court calculated father's income from his inheritance by dividing the inheritance over three years.
Under Oregon law, the amount of child support a parent must pay is determined by a procedure established by the Department of Justice pursuant to ORS 25.275.
As mentioned, in this case, father argues that the trial court erred in two respects when it calculated his gross income. Specifically, father argues that the court erred by including the inheritance in his gross income and by using a four-year average to calculate his gross income. We address those arguments in turn.
First, father argues that "gross income" as defined by former OAR 137-050-0340(1) (10/1/07) does not include inheritances. That provision states that "gross income" includes
(Emphasis added.)
From the text of former OAR 137-050-0340(1) it is apparent that gross income
Father argues that to determine whether an inheritance should be included in gross income, we should employ a two-part test created by the Colorado Supreme Court in In re the Interest of A.M.D., 78 P.3d 741 (Colo.2003). The Colorado child support guidelines at issue in A.M.D. provided:
Id. at 743 (quoting Colo. Rev. Stat. § 14-10-115(7)(a)(I)(A) (2002)) (emphasis in A.M.D.). Interpreting that definition, the court held that "monetary inheritances are in fact `monetary gifts' under the meaning of [the child support guidelines], and are neither future nor speculative events[.] * * * [A] monetary inheritance may be included in gross income for purposes of calculating child support." Id. at 745. But, the court continued, "courts should examine the nature and use of an inheritance when deciding how much of the principal to include in gross income." Id. at 746. Specifically, the court held, courts must employ a two-part test:
Id. (brackets in A.M.D.).
Father argues that we should adopt Colorado's two-part test for determining whether an inheritance should be included in a parent's "gross income" under former OAR 137-050-0340(1). We decline to do so because, under Oregon's child support guidelines, whether income received by a parent should be included in the parent's gross income does not depend on how the income is used or
In Halpert, we held that the father's voluntary contribution to a 401(k) retirement account was gross income, even though it was an investment and the father would suffer adverse tax consequences if he withdrew the money from the account before he reached retirement age. We explained that "OAR 137-050-0340 does not define gross income as gross taxable income; it is `income from any source[.]' The amount of child support that is presumed to be the correct amount is determined from that gross income. It is in rebutting that amount that tax factors may be considered."
Thus, gross income, as defined by former OAR 137-050-0340, includes "income from any source," regardless of how the income is used and how available it is. The use and availability of the income is relevant only to whether the parent's presumptive child support obligation has been rebutted.
Relying on Thanhouser and Thanhouser, 198 Or.App. 472, 108 P.3d 667, rev. den., 339 Or. 407, 122 P.3d 65 (2005), father argues that Oregon courts have considered the use of money received by a parent when determining whether to include the money in gross income under former OAR 137-050-0340. In Thanhouser, the trial court ordered the mother to pay child support based on a gross income calculation that included $1,000 that the court found that the mother "would earn if she converted some of her existing assets into assets that would generate more income." Id. at 477-78, 108 P.3d 667. We reversed, holding that it was error to attribute that income to the mother, at least in the absence of a plan on her part "to alter the nature or form of her assets." Id. at 479 n. 5, 108 P.3d 667. Father argues that Thanhouser establishes that "whether [an] asset is or produces gross income" depends on "the parent's actual use of the asset." Father reads too much into Thanhouser. That case establishes only that a court cannot require a parent to convert an asset in order to increase his or her income when the parent has no plans to do so. It relates to income that could be received, not to income that—like the inheritance in this case—has been received.
Here, father received a cash inheritance of $75,000 and, contrary to his argument in the trial court and on appeal, the trial court properly included the inheritance when calculating father's gross income to determine his presumptive child support obligation.
In his second assignment of error, father argues that the trial court erred by averaging his income from 2004 to 2007 to determine his gross income. When determining a parent's gross income for child support purposes, a trial court must inquire into the parent's present income. See, e.g., Waterman and Waterman, 158 Or.App. 267, 272, 974 P.2d 256 (1999) ("[T]he evidence that [the] husband worked more overtime in the past for a different employer is not germane
Here, father's business and rental income both vary from year to year, so averaging is appropriate. Father argues that using the average of several years artificially inflated his income because his income was declining. The trial court relied on father's tax returns from 2004 to 2007, finding his income to be $41,968 in 2004; $41,506 in 2005; $55,204 in 2006; and $40,776 in 2007.
Father argues that other evidence—specifically, profit and loss statements comparing January and February 2008 to the same months in 2007, and his own testimony that he has reduced his expenditures—show that his income has declined. However, that evidence is not as comprehensive or reliable as father's tax returns, and, therefore, the trial court did not err in averaging father's income, as reported on his last four tax returns, to calculate his gross income.
Affirmed.
Father's brief cites Humphreys v. DeRoss, 567 Pa. 614, 790 A.2d 281 (2002), but that case is inapposite because the definition of "income" at issue differed from Oregon's definition of "gross income" in two ways. First, it did not include "gifts." Second, although it included "income from an interest in an estate or trust," it "did not include the principal of an inheritance or trust," and, therefore, according to the Humphreys court, "it [was] logical to assume that the legislature did not intend to include the principal." 567 Pa. at 620, 790 A.2d at 285.
