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STANDARDS OF ASSISTANCE Regulations INCOME 44-113 (Cont.)

44-113 NET INCOME (Continued)

f. Sale of crops

Deduct from gross income the following expenses which are incurred.

1. Taxes and assessments. 2. Interest on encumbrance payments (do not deduct principal payments.) 3. Water cost. 4. Necessary repair and minor replacement of buildings and equipment. 5. Fertilizer, seed, insecticides, pruning, cultivation and harvesting costs. 6. Rental of equipment. 7. Wages. 8. Losses on crops from the previous period. 9. Other necessary expenses.

Prorate the annual expenses such as taxes, assessments, etc., according to the intervals at which the gross income was received. If other expenses cannot be identified with a particular period, determine the method which assures that the expenses are allocated as closely as possible to the period of crop income, and that on a continuing basis all necessary expenses are deducted from gross income.

g. Sale of Livestock

Proceeds from the sale of the increase of livestock (i.e., that portion which represents a capital gain) is gross income. Deduct expenses incident to raising the livestock (such as feed, pasture rent, prorated personal property tax) in computing net income.

Since such income is usually received at intervals of more than one month, the same principles that apply to determining the periods of expense for the sale of crops, apply to the sale of livestock.

Note:

Proceeds from the sale of an entire holding of livestock are not income but conversion of property.

CALIFORNIA-DSS-MANUAL-EAS MANUAL LETTER NO. EAS-98-03 Effective 7/1/98

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