Rental Property and Roomer Income
(02/01/14 – 03/31/14)
Income received from rental property is countable, and can be either of the following:
Self-employment Rental Income
NOTE Policy in this section also applies to income received from individuals that rent a room in a home owned and occupied by a participant. (See Boarders when meals are provided)
Treat rental property income as self-employment when a participant manages the property (e.g. rent collection, maintenance, or other work).
An average of at least 20 hours per week must be spent managing the rental property to be considered self-employment. AZTECS applies both of the following to self-employment rental income:
20% earned income deduction.
40% self-employment expense deduction when at least one self-employment expense is verified. (See Example Rental – Self-employment)
Determine the identifiable allowable business expense when the owner of the rental property does not have a separate meter and both of the following occur:
The owner resides in the home
The owner manages the property
A personal shelter expense cannot be claimed for an allowable business expense.
When expenses are incurred, see Allowable Business Expenses.