Farr v. Little, 411 P.3d 630

Unmarried parents, Justin Farr (father) and Brandi Little (mother), separated; Little awarded custody after domestic-violence presumption applied.
Farr is a military medical retiree receiving $21,185.76/year in disability (80% disabled) and has not held full-time civilian employment since separation from the Air Force.
Little moved for child support and argued Farr was voluntarily underemployed and could earn substantially more (suggested HVAC pay and six-figure defense-contractor offers); trial evidence on those claims was limited.
The superior court imputed $40,000 of additional annual after-tax income to Farr (in addition to disability) and did not expressly deduct claimed rental-property losses/depreciation; it calculated Farr’s adjusted annual income at $62,207.76 and ordered child support.
Farr appealed, arguing (1) the $40,000 imputation lacked evidentiary support and (2) the court improperly failed to apply his claimed rental losses and depreciation as deductions.

Issue	Little's Argument	Farr's Argument	Held
Whether Farr could be imputed income for voluntary/unreasonable underemployment	Farr is capable of working and Little met prima facie burden to impute income	Farr is 80% disabled; unemployment is involuntary	Court: Little made prima facie showing; burden shifted to Farr to rebut (prima facie met)
Whether $40,000 imputed income is supported by record	Supported by Farr’s testimony about six-figure offers and Little’s HVAC suggestion	No evidence supports $40,000; offers and HVAC claims are speculative	Vacated and remanded: $40,000 not adequately explained or supported; remand for findings/evidence
Whether Farr may receive disability and imputed wages concurrently	Imputation assumed additional wages possible alongside disability	Farr contends working would terminate disability benefits	Remand: court must determine whether employment would reduce/terminate disability; Farr must prove disability would continue if he worked
Whether claimed rental losses and depreciation reduce income	Little implicitly questioned losses; court skeptical of losses as shelters	Farr says tax losses (including depreciation) should offset income	Remand: court failed to explain treatment of rental losses; straight-line depreciation generally deductible unless shown to be inappropriate or accelerated; Farr must show method used

Sawicki v. Haxby, 186 P.3d 546 (Alaska 2008) (prima facie burden and framework for imputing income for underemployment)
Limeres v. Limeres, 320 P.3d 291 (Alaska 2014) (standard for reviewing child support and imputation issues)
Beaudoin v. Beaudoin, 24 P.3d 523 (Alaska 2001) (imputation and remand for evidentiary hearing where prima facie showing made)
Kowalski v. Kowalski, 806 P.2d 1368 (Alaska 1991) (obligor must establish earning capacity when rebutting imputation)
McDonald v. Trihub, 173 P.3d 416 (Alaska 2007) (trial court discretion to select best indicator of future earning capacity)
Eagley v. Eagley, 849 P.2d 777 (Alaska 1993) (straight-line depreciation of business real estate is an allowable expense under Rule 90.3)
Ogard v. Ogard, 808 P.2d 815 (Alaska 1991) (distinguishing accelerated depreciation from allowable straight-line depreciation)