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$200 a month and food costs equal $300. One-fifth of $200 = $40. One-third of $300 = $100. $140 is deducted from gross rental income. $60 is budgeted as net rental income.

3420.00.00 RENTAL INCOME

Rental income is payment for the use of real or personal property. Rental payments may be received for the use of land (including farmland), for land and buildings, for a room, apartment, or house, or for machinery and equipment. 3420.05.00 BUDGETING RENTAL INCOME

Rental income may be considered either unearned or earned income. Regardless, for all programs, income from rental property is determined by the costs of doing business being deducted from the gross income.

For SNAP, rental income is unearned unless a member of the AG is actively engaged in the management of the property at least an average of 20 hours per week. If the income is earned, the 20% earned income disregard is subtracted from the gross.

For CASH, rental income is unearned unless the production of income includes some type of personal involvement and effort on the part of an AG member. 3420.05.05 ALLOWABLE RENTAL EXPENSES

Allowable rental expenses include most costs allowed by the Internal Revenue Service. Examples of rental expenses allowed are: • Property taxes; • Interest payments (and principal payments for SNAP); • Repairs; • Advertising expenses; • Lawn care; • Insurance premium for property only; • Trash removal expenses; • Snow removal expenses; • Water; • Utilities; and • Other necessary expenses.

The following costs are allowed by the Internal Revenue Service, but are not allowable deductions for all assistance programs: • Depreciation; • Payments on mortgage principal (Note: these are allowable for SNAP); • Personal expenses of the owner; • Insurance to pay off the mortgage in the event of death or disability; and