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Title 7: SNAP Page 70 Iowa Department of Health and Human Services Employees’ Manual Chapter I: Specific Households and Participants Self-Employed Households Revised February 13, 2026 Determining Assistance

A farmer sells a tractor for $10,000 after having paid $12,000 for it five years ago. During the five-year period of ownership, depreciation was calculated at a rate of $1,200 per year. Capital gain is computed as follows: $ 10,000 - 12,000 + 6,000 $ 4,000 Sale price Purchase price Depreciated amount ($1,200 per year x 5 years) Actual gain from sale of equipment If capital gain amounts are obtained from federal income tax forms, use the entire proceeds of the sale, even though only a percent of the proceeds is taxed for federal income tax purposes. Even and Uneven Proration for Benefits Legal reference: 7 CFR 273.11(a) An eligible household with self-employment income has the option of having benefits determined either:  By using the same net self-employment income that was used to determine eligibility (an even monthly amount), or  By unevenly prorating the household’s annual self-employment income over the period for which the household’s self-employment income was averaged, to more closely approximate the time the income is actually received. When net self-employment income is unevenly prorated, assign it so that the self- employment income together with other income and deductions at the time of certification will not exceed the maximum monthly net income eligibility standard for the household’s size. Households normally decide between even and uneven proration at the time of certification and cannot change the decision during the certification period. Ending Self-Employment Legal reference: 7 CFR 273.11(a)(1) A person is no longer self-employed when the person files Chapter 7 bankruptcy. Consequently, the resource exemption for property essential to self-employment would no longer be granted. However, any assets under the jurisdiction of a trustee are not considered available to the household nor counted as resources. See Self-Employment Policies for Farmers for specific provisions relating to ending farming.