Earned Income From Rental Property

Section 113 Section 113.133  Earned Income From Rental Property a)         Income which a client receives from rental property which he owns shall be considered earned income if the client is actively engaged in the management of the property for an average. b)         When determining net income, the reasonable and necessary rental expenses which the client incurs in the production of income may be deducted from the gross income. c)         If a client is responsible for cleaning a room and providing clean linens, the income which he receives shall be considered earned income from a roomer rather than earned income from rental property. d)         After deduction of rental expenses, the appropriate employment expenses as specified in Section 113.125, shall be deducted to determine net rental income. e)         The appropriate earnings disregard shall be deducted from gross rental income (after deducting expenses) to determine net income.