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calculate actual expenses. 010.02(B) ITEMIZED DISREGARDS FOR SELF-EMPLOYMENT. For individuals who incur operating expenses related to producing the goods or services which are itemized on the individual’s tax return, the actual allowable operating expenses are deducted from gross income. 010.02(C) OPERATING EXPENSES-FARM INCOME. For individuals who incur operating expenses related to farming, the operating expenses will be deducted from income. 010.02(D) OFFSET OF EARNINGS. If a household has a combination of farm, self-employment, or regular earned income, a loss from one source of income may be used to offset a gain from another source. 010.02(E) EXPENSES NOT DISREGARDED. The following expenses are not allowed as self-employment expenses: (i) Net losses from previous tax years; (ii) Federal, state, and local income taxes, money set aside for retirement purposes, and other work related personal expenses, such as transportation to and from work; (iii) Depreciation; and (iv) Depletion. 010.03 EARNED INCOME DISREGARD. Ten percent of a household’s gross earned income shall be disregarded after 12 months of continuous eligibility where there has been an open case, and at each subsequent redetermination. 010.04 INCOME EXCLUSIONS. In determining a family’s eligibility, the following income is excluded when determining eligibility (1) Aid to Dependent Children grant; (2) Money received from participation in the Foster Grandparent Program authorized by the ACTION Program; (3) Money awarded by the Indian Claims Commission or the Court of Claims; (4) Alaska Native Claims Settlement Act payments (to the extent that these payments are exempt from taxation under section 21(a) of the Act); (5) Money received from the sale of property such as stocks, bonds, a house, or a car (unless the person was engaged in the business of selling the property in which case the net proceeds would be counted as income from self-employment); Page 12 of 41