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Is MS “ income” in child support calculations?

Is MS “ income” in child support calculations?

Old Jun 28, 20, 10:12 am
  #1  
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Is MS “ income” in child support calculations?

Ex is asking judge to consider points and cashback redeemed as income, for purposes of calculating child support. Has anyone been here before? TIA
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Old Jun 28, 20, 10:52 am
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Originally Posted by meanderingtoes View Post
Ex is asking judge to consider points and cashback redeemed as income, for purposes of calculating child support. Has anyone been here before? TIA
I believe that questions like this one proves why we need lawyers (and preferably good ones).

I would go and find such a person and pose the question to him/her and not trust what people on a internet board say, (even if I am staying at a HGI )
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Old Jun 28, 20, 11:37 am
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Originally Posted by radonc1 View Post
I believe that questions like this one proves why we need lawyers (and preferably good ones).

I would go and find such a person and pose the question to him/her and not trust what people on a internet board say, (even if I am staying at a HGI )
I'm not asking for legal advice. To-date, I've invested 50k in family lawyers. I'm searching for others who have personal experience with this matter, in hopes that they can share the arguments that were made or relevant case law. This is a relatively minor aspect of the case that has just come up now, in the 11th hour. Paying attorneys to search through case laws for something that confuses them, where various search terms might or might not be relevant, without first asking those who have significant MS experience, would have been foolish. Family law most often deals with regular W2 income, which doesn't reflect my situation. The forensic accountant that the other party hired knows nothing about MS or churning. She referred to it as "credit card spinning" which, when googled, brings up videos of spinning credit cards. In other words, to my knowledge, MS isn't a thing that the family law system or accounting industry knows about or understands. It's my job to introduce them to it. If anyone else has been here, done that. I would appreciate their insight.
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Old Jun 28, 20, 1:49 pm
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First of all, I'm not your attorney or accountant and advise you seek further counsel. We know the IRS and courts have ruled in the past that points gained from spending on a credit card is simply a rebate from the credit card issuer and therefore not income. But, bonus money gained from opening a checking account, for example, is considered interest therefore must be treated in that way. But, another way to look at it, if the points were gained as a family then I can see those being split between parties just like the value of property. Furniture isn't income, but is property. Now, if you're talking about future points, I could see that as a sticky point and pure conjecture. If someone would want half of all future points earned, well I could see a problem. But, if you both own a business in which it is based on points, referral bonuses and such, then if the business is legally split then it's like any other business that was built together. But, there are so many variables including the laws of the state you live in. This is not advice, just thoughts. I think of points and miles gained from spending on credit cards as coupons. If you have a box of 1000 grocery store coupons and the parties agree to split all property, then each gets 500 coupons (if equal value). Also, the points don't do any good unless at some point they are used to get something of value. Points and miles in rewards programs usually have no value according to the program rules, until they are redeemed and only the company which honors those points with something places a value on it at the time of redemption. So there's that. Anyhow, I may be wrong in my examples and comments. It is interesting.
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Old Jun 28, 20, 2:10 pm
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Thanks. I have counsel. Unfortunately family lawyers around here don't seem to have much experience beyond W2 income. Think your point that value is received upon redemption is important and I'll gather supporting documentation for that. Thank you!
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Old Jun 28, 20, 2:29 pm
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It should be treated like the IRS treats it. Credit card rewards are rebates, not income. Unless your spouse wants to report all the sales they take advantage of (or miss....) it should be treated as using a coupon. Bank bonuses for new savings or checking accounts are different, they are treated as income.
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Old Jun 28, 20, 3:50 pm
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Originally Posted by dethkultur View Post
It should be treated like the IRS treats it. Credit card rewards are rebates, not income. Unless your spouse wants to report all the sales they take advantage of (or miss....) it should be treated as using a coupon. Bank bonuses for new savings or checking accounts are different, they are treated as income.
This is pretty much what I was thinking - that it should depend on on how the IRS treats it. That seems most logical but, of course, logic and divorce proceedings are often words that don't belong in the same sentence.
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Old Jun 28, 20, 4:54 pm
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Credit card interchange fees are priced into everything you buy. CC rewards is just giving you back a portion of the CC issuer interchange fees that were priced into the item by the merchants to begin with (hence why they are called rebates). I suspect this is how the IRS came to their conclusions as well. If CC rewards would be counted as income, it would be double counting your income because the money that is returned to you from the credit card company is your own money to begin with!!

Last edited by CerealCardSpender; Jun 28, 20 at 5:02 pm
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Old Jun 28, 20, 7:14 pm
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This is fascinating. Thank you. Trying to graph it out now to make it easy for everyone to grasp.
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Old Jun 29, 20, 5:49 am
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Just stop msing for a few months until it’s finalized.
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Old Jun 29, 20, 6:10 am
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Originally Posted by meanderingtoes View Post
Ex is asking judge to consider points and cashback redeemed as income, for purposes of calculating child support. Has anyone been here before? TIA
Points? You may not really own them for the most part, in the US, if that is what the program terms say, and then they aren’t really income. Cash-back? That is different in parts. Lawyer up well (and not excessively).

That reminds me to ask some current and former US federal prosecutors what happened to the cases where they wanted to also disgorge the miles/points that some drug traffickers racked up during their criminal operations. I told them that I thought it was a waste to expect government seizure since the US programs generally claimed the points are not owned by the individuals whose accounts were credited with a miles/points balance for use and that they should just send a letter to the program owners/operators stating the accounts were being used and credited miles/points in the course of criminal operations.
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Old Jun 29, 20, 7:33 am
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Originally Posted by dethkultur View Post
It should be treated like the IRS treats it.....
Why? Interest paid by many municipal bonds is exempt from Federal income tax, but it is still income.

The ownership of miles or points need not be considered if the value received is calculated when they are redeemed, rather than when the are awarded.
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Old Jun 29, 20, 8:08 pm
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Originally Posted by mia View Post
Why? Interest paid by many municipal bonds is exempt from Federal income tax, but it is still income.

The ownership of miles or points need not be considered if the value received is calculated when they are redeemed, rather than when the are awarded.
Please ask AA for the value of my miles they took, since they were awarded by Citi and yet to be redeemed on AA. If we went by your comment in bold then AA's actions would be theft since I followed by the terms of both programs and offers.
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Old Jun 29, 20, 8:37 pm
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Originally Posted by mia View Post
Why? Interest paid by many municipal bonds is exempt from Federal income tax, but it is still income.
Interests on tax exempt bonds are still reportable. But IRS does not require to report credit card proceed unless a Form 1099-INT has been issued.
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Old Jul 1, 20, 6:51 am
  #15  
mia
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Originally Posted by jnjustice View Post
Please ask AA for the value of my miles they took.
Originally Posted by garykung View Post
.... IRS does not require to report credit card proceed unless a Form 1099-INT has been issued.
Neither of these replies explains why IRS rules should be used to value rewards in a divorce settlement.
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