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CAPITAL GAINS AS INCOME

ISSUE DATE: 10/2016

MFIP, DWP, GA, GRH:
Capital gain is an Internal Revenue Service (IRS) term for proceeds from the sale of real property. The gain is the difference between the purchase and selling price of the real property minus allowable expenses. Count capital gains from the sale of real property as unearned income.

The IRS Capital Gains and Losses form (1040 - Schedule D) includes real property capital gains. The client must report Schedule D capital gains from the sale of real property. Use the tax form figures to verify the countable capital gain.


SNAP:

Capital gain is an Internal Revenue Service (IRS) term for proceeds from the sale of capital assets. The gain is the difference between the purchase and selling price minus allowable expenses.

Capital gains from self-employment businesses count as income. Unless the client is in the business of selling assets, exclude capital gains from the sale of the client's assets, regardless of whether the asset was excluded. If the client is in the business of selling assets, such as a farmer who holds grain until the prices change, the capital gain is self-employment and counts as income.

Capital gains recorded on self-employment tax forms, such as Schedules C and F, include items such as the sale of livestock or grain. You may not be able to distinguish capital gains on self-employment forms from other self-employment income.

The IRS Capital Gains and Losses form (Schedule D) includes excluded and counted capital gains. The client must clarify whether Schedule D capital gains are from the sale of an asset or from self-employment.

In addition to capital gains from the sale of assets, Schedule D includes capital gain distributions. Capital gain distributions are dividends from stock or mutual funds. See 0017.15.42 (Interest and Dividend Income).

Use the tax form figures to verify the countable capital gain. If the client did not file tax forms, determine the capital gain using self-employment income procedures. See 0017.15.33 (Self-Employment Income).

Count capital gains only if the client will continue to have capital gains in the certification period.


MSA:

For SSI recipients no action is required, SSA makes all income determinations.

For non-SSI recipients follow GA.

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