Why are my investment property expenses excluded from child support? How to argue for inclusion?

Question

I had a child support hearing where the judge refused to include certain expenses related to my investment property in the support calculation. These expenses include a maintenance percentage, a vacancy percentage, costs for adding heating and air conditioning, and the HELOC debt on the property. The judge only allowed the first mortgage and HOA expenses, without providing specific reasons for the exclusion. I had tried to include these expenses in previous calculations, but they have not been recognized. I do have documentation supporting these expenses. What family code might the judge be using to have this discretion, and how can I argue to have these costs included?

Tobie B. Waxman · Answer

Child support is calculated using the parties' INCOME.  If the investment property you are talking about is an income producing property and that income is impacted by the expenses of maintaining that property, that will be reflected in your tax return used as evidence of your income.  Otherwise, monthly expenses of any nature (other than health insurance premiums and union dues and certain other specific monthly expenses pre determined by the software used to calculate support) are not used in calculating child support.

James L. Arrasmith · Answer

In California, judges typically use Family Code sections 4058-4059 when determining which expenses reduce your income for child support calculations. These sections give courts discretion to include only expenses deemed necessary for income production, not those considered discretionary investments or property improvements. The judge likely viewed your maintenance percentage, vacancy reserves, HVAC additions, and HELOC as capital improvements or optional expenses rather than essential costs directly tied to maintaining current rental income. 
 
To effectively argue for inclusion, gather evidence showing these expenses are standard, necessary costs in rental property management—not optional improvements. Present industry guidelines recommending maintenance and vacancy reserves as essential business practices, not discretionary spending. For the HELOC and HVAC costs, demonstrate they were necessary repairs to maintain habitability and current income levels, not enhancements to increase property value or future income potential. 
 
During your next hearing, frame your argument around Family Code § 4058(a)(2), which allows deduction of expenditures required for income generation. Prepare a detailed financial statement showing how excluding these legitimate business expenses artificially inflates your disposable income available for support. Bring documentation like contractor estimates showing the necessity of repairs, rental market analyses demonstrating standard vacancy rates, and proof that similar properties require these maintenance reserves to remain profitable.

Q: Why are my investment property expenses excluded from child support? How to argue for inclusion?