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.

Only count income from capital gains if the client is self-employed AND is in the business of selling assets, such as a farmer who holds grain until the prices change.

Some programs allow you to use tax forms to verify capital gains. 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).


MFIP, DWP:
Proceeds from the sale of assets, while excluded as income, may be counted as assets. See 0015.01 (Counted Assets).

When a self-employment business closes, count the proceeds from sale of assets (EXCEPT vehicles) used in the business as self-employment income.


SNAP:
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, GA, GRH:
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.