317:35-5-41.12

Real and/or personal property which produces income is excluded if it meets the conditions of a trade or business or a non-trade or non-business property conditions.

Trade or Business Property

The existence of a trade or business may be established through business tax returns that would be used to compute self-employment earnings.   Once it is established that a trade or business exists, any property (real or personal) connected to it and in current use is excluded as a resource.  This exclusion includes liquid assets, such as a bank account(s) necessary for the business operation.  All property used by a trade or business and all property used by an employee in connection with employment is excluded as property essential to self-support.

The income from the trade or business is determined as any other self-employment income. When the applicant declares self-employment income on rental property, the rental property is excluded as a resource. They must be engaged in the business for it to be considered self-employment.

example:

Tom and Ann Zimmerman jointly own 2 rental houses that have a combined market value of $200,000. Ann has applied for ADvantage services. Tom helps with the upkeep of the property and collects the rent and they file self-employment on the rental homes. How would this property and income be considered in determining her eligibility?

Since it is self-employment, the market value of the houses will be exempt as a resource.

The income would be considered earned income since he invests his labor in producing the income. Because both names are on the properties, the self-employment income would be divided into half, ½ would be Tom’s and ½ would be Ann’s income. The most current tax return will be used to determine the monthly income. Allowable deductions will be given.