Heater v. Heater

302 S.E.2d 891, 62 N.C. App. 587, 1983 N.C. App. LEXIS 2936

• Court: Court of Appeals of North Carolina
• Decided: June 7, 1983
• Docket: No. 8228DC830
• Status: Published

Opinion

WEBB, Judge.

The only question on this appeal is whether gross income includes a gain realized from the sale of property. We hold that it does. The separation agreement does not define gross income, but we believe it is ordinarily understood to include a gain on the sale of property. The defendant argues that although a capital gain is considered income under the Internal Revenue Code, it is not actually income but the transfer of value of something to the value of something else. Whatever the technical economic meaning of the sale of property may be, we believe that most people consider a gain in the sale of property as income. Our thinking may be influenced by the Internal Revenue Code, but we believe that knowledge of the Code is so pervasive that the use of words “gross income” includes in the minds of most people a gain on the sale of property.

The defendant submitted an affidavit in which he stated that when he signed the separation agreement, he did not intend to include gains on the sale of property as income. We do not believe this uncommunicated understanding can alter what we hold are the plain words of the contract. The defendant also argues that the gain on the sale of the real property should not be included in his gross income because he received an interest from the plaintiff in the property by way of a deed executed contemporaneously with the separation agreement. He advances no reason why this is so and we cannot find such a reason.

Affirmed.

Judges Arnold and Braswell concur.