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Chapter: 1600 Assets

Program: FS 9 1610.0544 Income Producing Property (FS) An individual can exclude the fair market value of any income producing property that is producing income consistent with its fair market value (FMV). Rental property is excluded if the property annually produces income consistent with its fair market value, even if only used on a seasonal basis. (The fair market value of property is determined by comparing the property in question to like property in the area.) Income producing property (including equipment) includes items such as farmland, work related equipment essential to the employment of an individual or rental property. Refer to Chapter 1800 for policy on the treatment of this income. 1610.0545 Installment Contracts (FS) An installment contract for the sale of property as well as the property held in security by the contract will be excluded as an asset if it is producing income consistent with its fair market value. 1610.0546 Rental Property (FS) This policy does not apply if the rental property is essential to the employment or self-employment of a household member. For example, a farmer might own rental houses and use them for housing his employees. See Chapter 1800, Income, for determining expenses and income of the property. 1610.0550 Indian Land (FS) Land that is held by an enrolled member of an Indian tribe is excluded from assets if it cannot be sold or transferred without the permission of other individuals, the tribe, or a federal agency. 1610.0552 Life Insurance (FS) The cash value of life insurance policies is excluded as an asset. No verification is required. 1610.0556 Loans (FS) A loan is a transaction when one party (lender) advances money to another party (borrower) who promises to repay the debt in full within the borrower's lifetime. Repayment of loans may or may not include interest. A loan may take the form of a formal written document or an informal verbal agreement. A formal written loan agreement is a form of a promissory note.

A promissory note is a written, unconditional agreement signed by a person who promises to pay a specific sum of money at a specified time, or on demand, to the person, company, corporation, or institution named on the note. A promissory note may or may not involve the loan of money or goods (e.g., a promissory note may be given in return for goods or service rendered).

A personal and real property agreement is a pledge or security of a particular property or properties for the payment of a debt or performance of some other obligation within a specified time period.

Property agreements on real estate (land and buildings) are generally referred to as mortgages but may also be called land contracts, contracts for deed, or deed of trust, etc. Personal property agreements (e.g., pledges on crops, fixtures, inventory, etc.) are commonly known as chattel mortgages. 1610.0557 Counting Loans (FS) A loan is excluded as income to the AG. The portion of a loan that is not spent and is placed in a savings account will count as an asset in the month following the month of receipt.