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Chapter: 1800 Income

Program: RAP 31 A child's unearned income from WIA is excluded income. The parent/relative caretaker cannot be considered a child. Unearned income includes the same types of payments specified in passage 1860.0404. 1860.0406 Verification of WIA Income (RAP) Verification should include:

1. source, 2. amount received, 3. date(s) paid, 4. frequency, 5. purpose, and 6. type of payment. 1860.0500 REAL ESTATE INCOME (RAP) Income from real estate includes any funds resulting from property ownership. This income can be earned or unearned.

Passages 1860.0503.01 through 1860.0503.03 describe income received from rental property, sales contracts on property, and room and board. 1860.0503.01 Rental Income (RAP) Rental payments are unearned income if the individual does not actively manage the property as a business. Rental income is any payment for using real or personal property less allowable expenses. Examples of rent include payments for the use of:

1. land; 2. buildings; 3. an apartment, room, or house; or 4. machinery or equipment.

Income received from the rental of real estate is considered earned income if the arrangement requires participation by the parent or relative in managing the property. If the property is managed by someone else, the income received from the rental of the real estate is unearned income. 1860.0503.02 Computation of Rental Property Income (RAP) Income from rental property is computed as follows:

For improved rental property owned by the parent or relative, the earned income is the amount of cash received, or anticipated to be received, minus 25 percent of gross rental receipts if the owner is responsible for upkeep and repairs. A deduction is recognized for taxes and the interest portion of mortgage payments (to the extent interest is a business expense) for property other than the homestead. These deductions cannot be allowed for the AG residence on homestead property, but can be allowed (by prorating rental) for structures on the homestead property.

For unimproved rental property owned by the parent or relative, the earned income is the amount of cash received, or anticipated to be received, minus 15 percent of gross rental receipts if the owner is responsible for upkeep of fences, wells, and the like. A deduction is recognized for taxes and the interest portion of mortgage payments on property other than the homestead.