In Re the Marriage of Zisch

Judge TAUBMAN

specially concurring.

Although I agree with the majority’s conclusion that the trial court abused its discretion in treating father’s capital gain as income for purposes of determining child support modification, I write separately to express a somewhat different analytical approach to this issue. Specifically, I conclude that: (1) under § 14-10-115, C.R.S. 1998, a capital gain may be considered as income only in the month in which it was received, and not for one year, as the majority indicates, and (2) that after the month of receipt, the capital gain should be considered as a financial resource of father, both as to the principal itself and as to interest income which that principal may reasonably be expected to generate. Finally, because of the uncertainty as to how to treat one-time lump sum receipts of income, such as capital gains, under § 14-10-115, I further conclude that this issue deserves further attention from the Colorado Child Support Commission and the General Assembly.

I. Capital Gains as Income

I begin with the premise that under § 14-10-115(7)(a)(I)(A), C.R.S.1998, capital gains are included within the definition of “gross income” for application of the child support guidelines. Thus, mother here correctly contends that the capital gain itself must be treated as income, and not just the interest that might reasonably be expected to result from that capital gain. See, e.g., In re Marriage of Bregar, 952 P.2d 783 (Colo.App.1997) (capital gains from stock sale not considered as income to husband; rather, capital gain considered as asset, and reasonable interest income generated from that asset considered income for purposes of modifying child support).

Once a capital gain is considered as income, the next question is over what period should such income extend.

Here, as the majority notes, the magistrate and trial court treated father’s $262,000 capital gain as income spread evenly over father’s projected lifetime. On appeal, mother suggests as one alternative that the $262,000 capital gain be spread over a period which would be begin with the filing of the motion to modify child support and which would end when the parties’ younger child reaches the age of majority. A third approach, taken by the majority, is that the capital gain should *205be considered initially as a component of the recipient’s gross income for the year in which the gain was received. It appears that the majority intends that the capital gain be considered in the calendar year in which it was received.

Although each of these approaches has some appeal, none of them is grounded in the express language of § 14-10-115. Spreading a capital gain over the lifetime of its recipient ensures a custodial parent a long-term benefit of increased income for purposes of child support computation. However, much of the period of that imputed income will occur during the noncustodial parent’s lifetime, but after the children have reached the age of majority.

Spreading the receipt of a capital gain over a period which terminates when the children reach the age of majority avoids this problem, but may lead to arbitrary and irrational results. Thus, for example, if a noncustodial parent receives a large onetime capital gain when his younger child is 16, that capital gain would be spread over a relatively short period, whereas a noncustodial parent with very young children who receives a capital gain will have that capital gain imputed as income over an extended period of time.

Further, there is no basis in the statute for spreading income over the expected lifetime of the noncustodial parent or over a period which ends when the younger or youngest child reaches the age of majority.

Finally, while there may be some basis in the statute for considering a capital gain to be income in the year it was received, see § 14-10-115(7)(c), C.R.S.1998 (tax returns may provide verification of earnings over a longer period), the one year approach is also problematic. If a capital gain is considered as income in the calendar year in which it was received, the actual period that it would be considered for purposes of modifying child support will vary depending upon the month in which the capital gain was received.

This is so for two reasons. When, as here, a capital gain is received in November, the amount of the capital gain would be considered as income at most for the months of November and December. In contrast, when a capital gain is received early in the year, it could be considered as income for most or all of the year.

Second, under § 14-10-122(l)(a), C.R.S. 1998, child support may be modified only as to installments accruing subsequent to the filing of a motion for modification. Thus, in most cases, a custodial parent will not learn of the receipt of a capital gain by the noncustodial parent until some time after it has occurred. What analysis applies, then, when a capital gain is received in November, but a motion to modify child support is not filed until February of the filing year? In such case, under the majority’s analysis, the capital gain would be considered as income only in the year in which it was received, but could not be considered as income for the following year, when the motion to modify child support was actually filed.

Here, in contrast, because of the fortuity of the husband filing a motion to reduce child support the month before he received his capital gain, we have considered that the trial court had authority to consider the capital gain as income as of the date husband originally filed his motion.

As can be seen from the above, practical and analytical problems result from considering a capital gain as income over an extended period of time. Accordingly, in the absence of legislative guidance, I conclude that the best approach is to consider the capital 'gain as income only in the month in which it was received, and thereafter as a financial resource. See § 14-10-115(10)(a)(II), C.R.S. 1998 (combined gross income determined by monthly adjusted gross income of parents).

This approach is consistent with the statute, because it considers the capital gain as income, and not just a resource. Further, this approach is fair because it would consider the one-time receipt of a capital gain to be considered the same in all cases, particularly when, as discussed below, the amount of the capital gain would be considered in subsequent months as a financial resource.

II. Capital Gain as Financial Resource

My second premise is that when a large one-time capital gain has been received by a *206noncustodial parent, such receipt constitutes a “substantial and continuing changed circumstance” pursuant to § 14-10-122(l)(a), C.R.S.1998. In such circumstance, even though the capital gain is a one-time occurrence, its receipt constitutes new wealth to the noncustodial parent which will constitute a “substantial and continuing changed circumstance.” As such, it may be considered as a basis for deviating from the child support guidelines under § 14-10—115(3)(a), C.R.S.1998 (deviation from the child support guidelines is permissible on any basis if their application would be inequitable, unjust, or inappropriate).

Thus, in my view, beginning with the month after receipt of the capital gain, that capital gain may be considered as an asset in two respects. First, it may be considered as an asset which will produce a reasonable amount of income which may be considered for the purposes of child support. See In re Marriage of Bregar, supra; In re Marriage of Armstrong, 831 P.2d 501 (Colo.App.1992). Second, the principal itself may be considered as a financial resource which will enable the noncustodial parent to pay a higher level of child support.

Here, for example, the trial court could reasonably conclude that apart from any interest income which father’s capital gain could reasonably be expected to generate, the $262,000 capital gain (which would increase by the accumulation of interest) could be considered as a basis for increasing father’s child support.

This is particularly true in the context of a motion to modify child support, as opposed to an initial determination of child support. This is so because an initial determination of child support usually occurs when there is a division of property, and at such time the court is required to ensure that each spouse receives an equitable share of property. However, in a post-dissolution context, when one party receives a large, one-time income, such income really constitutes new wealth which may afford an equitable basis for deviating from the child support guidelines so as to increase monthly child support.

III. Need to Consider New Legislation

As noted above, capital gain is considered as income under § 14-10-115(7)(a)(I)(A). That statutory provision also includes within the definition of gross income various other sources of one-time income, such as monetary gifts and certain lottery winnings. Because the statutory scheme does not clearly address how large one-time receipts of income should be considered for purposes of child support modification and particularly whether they should be treated as income, assets, or both, both domestic relations practitioners and trial court judges would be well served if the Colorado Child Support Commission and the General Assembly were to consider how best to address these issue. See § 14-10-115(18)(a), C.R.S.1998 (child support commission to review and recommend changes to child support guidelines); CAR 35(f).

In sum, I agree with the majority that the cause must be remanded for reconsideration of father’s capital gain as income for child support purposes. I would consider such capital gain as income only in the month it was received, and thereafter as an asset which may be considered for the purpose of deviation from the child support guidelines. In all other respects, I agree with the majority’s opinion.