Conversion of Assets 415-25-10-25

(Revised 11/02 ML #2829)

View Archives

 

 

Proceeds from the conversion of an asset such as the sale of capital items (may be reported as capital gains/losses held more than one year on IRS returns) may be held in some form of asset at the time of application.

 

To decide if these funds must be counted in the household's total assets, it must be determined if they are held in some form of an available asset or in an uncounted asset.

 

Example #1: The household sells a tractor for $3,000. If the seller still owed $500 on the tractor, he has an equity of $2500 which must be evaluated as an asset.

 

Proceeds from the sale of the tractor must be counted if held in a bank account at the time of application, but they would NOT be counted if used to purchase another machine used to produce income.

 

Example #2: A retirement account that is dispersed in a lump sum when a person changes employment would be counted as an "available" asset if held in a savings account, but would not be counted if used to buy a family car.