1115.000.00 Income

1115.040.05 Income to Self-Employed Households

IM-88 October 4, 2006; IM-167 September 10, 2001

Show the following items as income to self-employed EUs:

  • Sales of merchandise services
  • Sales of child care services, including baby-sitting and day care
  • Sales of produce, including dairy products, eggs, wool, grain, cotton, tobacco, vegetables, fruits, nuts, etc.
  • Sales of livestock. Consider any receipts from livestock sold whether held for draft, breeding, sporting, pets, dairy, or other purposes, as income when sold. Exclude sales from livestock owned by children under the provisions from income exclusions.

NOTE: Review IRS Schedule F (Form 1040), Profit or Loss From Farming; Schedule C (Form 1040), Profit or Loss from Business; and Form 4797, Sales of Business Property, to locate all income sources.

  • Receipts for work done for hire, such as custom baling, harvesting, etc.
  • Sales of timber, including logs, firewood, cedar posts, lumber, pallets, staves, and pulpwood
  • Capital gains, which is the sale of equipment, livestock, machinery, buildings, or land connected with the self-employment enterprise. All proceeds from these sales are available to meet the food needs of the EU, therefore, count the full amount of the gains as income to the EU. There may be recurring capital gain of sale of land. The sale of livestock is a short time capital gain. For EUs whose self-employment income is calculated on an anticipated (rather than averaged) basis, count the amount of capital gains the household anticipates receiving.

NOTE: IRS Schedule 4797, Sales of Business Property, and Schedule D (Form 1040), Capital Gains and Losses, are designed to reduce the taxable status of certain farm-related income; therefore, in order to determine the proceeds arising from sales of livestock, equipment, and land, carefully study the form to determine the proceeds derived from such sales. Lump-sum payments for the sale of property not connected with the self-employment enterprise are treated as provided in instructions for lump-sum payments, section 1115.015.60 Non-recurring Payments.

  • Payments received in cash by the EU from agricultural stabilization and conservation payments
  • Payments on interest on loans made to the self-employment enterprise or on accounts receivable
  • Income shown on IRS Schedule F from Commodity Credit Loans
  • Income shown on IRS Schedule F from patronage dividends from a cooperative
  • Income shown on IRS Schedule F from a per-unit retains allocation from a cooperative

NOTE: Do not consider non-recurring crop insurance payments and gasoline tax credits (federal or state) as income for FS purposes. Consider these payments a resource.

When the Secretary of Agriculture declares a farm emergency due to a natural disaster, any payments made under P.L. 100-387 to farmers following such a determination are excluded from income and resources.

  • Payments received from boarders in a commercial boarding house are considered income to the EU. Refer to 1115.065.00 Income From Boarders, for income received by an EU from a boarder in a non-commercial boarding house.