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Subtract the total allowable operational expenses paid (use same base period as used for income) from gross income received in base period. Divide by 12 (or the number of months used in base period) to determine the countable adjusted gross monthly income.

c. If the a/b states there have been a change in income and the method in a. above would not be accurate, apply the Gross-Net Ratio.

(1) Determine the ratio between the net profit and gross receipts for last year from the a/b’s tax return or business records (i.e., net profit of $1,200 for $6,000 gross receipts or 20%).

(2) Determine the actual gross receipts for the current taxable year thus far from the a/b’s records and project it for the remainder of the year (i.e., $4,000 in current year's receipts for the first 6 months gives an assumed gross of $8,000 for the entire year).

(3) Apply the gross-net ratio (i.e., 20% of $8,000 is $1,600) to the gross receipts projected for the year to obtain an estimate of net profit.

(4) Prorate the net profit equally into the 12 months of the taxable year.

d. Projecting Partial Years Profit for Whole Year

When the B.U. is engaged in a new business, have the individual supply a profit and loss statement or other business records for the taxable year to date so a net profit can be derived. Project for the year and prorate to a monthly amount.

9. Farm Operation Being Discontinued

a. Application

When processing the application, show as a resource the remaining portion of the current year's total available adjusted gross business income.

b. During the Certification Period

Include in reserve net proceeds still available from the dissolution of the farm business.

G. Tobacco Transition Payment Program (Tobacco Buyout)