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MEDICAL SERVICES POLICY MANUAL, SECTION E

E 516 Real Property Exclusions

b. PROPERTY EXCLUDED REGARDLESS OF VALUE OR RATE OF RETURN When non-home real or personal property is used in a trade or business essential to self-support (including personal property used by an employee for employment), the total equity value of the property may be excluded from resources. All of the liquid resources used in the operation of a trade or business may also be excluded as property essential to self-support. Some examples of property used for self-support are land and equipment used for farming; land, a building and equipment used for a dry cleaning establishment; or the land and multiple mobile homes being operated as a mobile home park business. Examples of property used by an employee to maintain employment are tools, safety equipment, uniforms, etc. The most recent tax return available may be used to verify current use of the property as a trade or business enterprise. Schedule C (Profit or Loss from Business or Profession), Schedule SE (Computation of Social Security Self- Employment), Schedule F (Farm income and Expenses), Form 4562 (Depreciation and Amortization) and Form 1065 (U.S. Partnership Return of Income) can be helpful in determining the validity of the trade or business. If a tax return is not available, other means of verification such as purchase receipts, bank statements, proof of payments, etc., can be used. The profit/loss shown on an income tax return is irrelevant in determining whether the individual is conducting a trade or business or whether the value of the property will be excluded from resources. c. PROPERTY WITH UP TO $6000 EXCLUDED REGARDLESS OF RATE OF RETURN Up to $6000 of the equity of non-home, nonbusiness real or personal property used to produce goods or services essential to daily living may be excluded from resources. There is no rate of return requirement. If the equity value exceeds $6000, only $6000 may be excluded; the remaining equity is a countable resource.