In this case, a married couple divorced after four years of marriage. They had one child. The husband worked as a survey tech earning about $31,000 per year and farmed on the side. The farming operation sustained a net loss in each of the 2006-2009 tax years. This was shown on the Schedule F (net earnings and losses from farming). Most of the net loss was attributable to substantial accelerated depreciation under §179. After reviewing the parties’ tax returns, the trial court judge informed the parties that he would ignore the farming losses and focus on the husband’s income from his full-time employment for purposes of calculating child support. The husband voiced no objections during trial. The trial court entered the decree of dissolution of marriage and ordered the ex-husband to pay $271.05 per month. There were no supporting documents, such as child support worksheets submitted by the parties to prove how the court arrived at this amount. The husband appealed the court’s decree as to the calculation of child support, asserting that the court did not take into account his Schedule F farming losses.
On appeal to the Iowa Court of Appeals, the ex-husband argued that the trial court should not have disregarded the loss from farming. However, according to the appellate court, it is appropriate to disallow losses attributable to accelerated depreciation on the Schedule F for calculation of child support, because §179 is a “tax benefit that, when utilized, may cause a tax return no to reflect the true economics of the farming operation.” In this situation, if the §179 depreciation had been recalculated on a straight line basis (instead of using the double declining balance method) the Schedule F would not have reflected any farm loss.
In the interest of justice, the appellate court determined that the trial court’s disregard of the farming income was proper in this case. At any rate, the ex-husband did not preserve his right to make the argument for inclusion of farm income or loss on appeal, because he failed to object to the trial court judge’s disregard of it at trial. In re Marriage of Vogl, No. 0-850/10-580 (Iowa Ct. App., Dec. 22, 2010).