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resource limit, go to Step 3. E. STEP 3: Determine the Equity Value for the 6% Income Test and the Amount of Income the Property Must Produce. 1. Use the equity determined in Step, unless a “present use value” is assigned by the tax office. 2. Present Use Value - The present use value is based on the value of the land in its current production use and is less than the tax value. (The county may use another term for present use value such as land use value, etc.). If a present use value is assigned, use it only for determining equity for the 6% net income test. (Do not use the present use value for the $6,000 portion of $6,000/6% test.) Deduct encumbrances from the present use value. 3. Multiply the equity value by .06 to determine the net annual income that the property must produce for the 6% test. F. STEP 4: Determine Net Annual Income Produced Verify the annual income amount produced by each piece of property. Use this amount only to determine if the property can be excluded from countable resources. 1. Calculate Gross Income a. If the same amount is received monthly, multiply this amount by 12 months (i.e., amount X 12 months = gross annual income). b. If received other than monthly, calculate a gross annual income amount, according to instructions in MA-2250, Income. c. If gross annual income has changed in the past 12 months (base period), use the amount currently being received to determine gross annual income. 2. Verify Operational Expenses Regardless of whether income is received monthly or other than monthly: a. Verify operational expenses for the previous calendar year based on expenses on the tax form if using tax statements to determine income, or b. Verify operational expenses for the twelve months prior to the application or redetermination interview for a business if using business records. (Do not include unexpected expenses as part of the 6% test.) 3. Deduct gross annual allowable operational expenses paid by the a/b. 56