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Guide for Completing Form 8823 - page 47 / 197





47 / 197

A potential tenant buys a United States savings bond for $50 each month through a savings program offered by his employer. At the time of his application for housing, he is holding 18 bonds, which have a face value of $931; i.e., $900 investment and $31 accumulated interest. The savings bonds are included as assets and the anticipated interest that will be earned is included as income even though the interest is added to the value of the bond.*

*Contract Sales of Real Estate Assets*

A tenant may sell real estate using an installment contract (or similar agreement) that provides a stream of payments over a period of time. A portion of the payment will be applied to the principal and a portion will be interest income. The interest should be included in income; the outstanding principal *as the effective date of the certification is considered an asset. The value of the asset will decrease over time as the loan is repaid.*

*Periodic Social Security Payments*

The gross amount of periodic Social Security payments, before deductions, is included in income. Payments received by adults on behalf of individuals under the age of 18 or by individuals under the age of 18 for their own support are also included.

Example 1: United States Savings Bonds

When social security or SSI benefit income is paid in a lump sum as a result of deferred periodic payments, that amount is excluded from income.

*Periodic Payments, Retirement Accounts, Annuities, and Trusts*

The full amount of periodic payments from *annuities, insurance policies, retirement funds, pensions and disability or death benefits is included in income. Examples of periodic payments include* Black Lung Sick benefits, Veterans Disability, Dependent Indemnity Compensation, and payments to the widow of a serviceman killed in action. *Payments from long-term care insurance (in excess of $180 a day) are included in income.

Federal government/*Uniformed Services, state, local government, social security or private* pension funds are not included in income if paid directly to a former spouse according to the terms of a court decree of divorce, annulment or legal separation. *However, if a tenant is the former spouse and is receiving any amounts pursuant to a court ordered settlement in connection with a divorce, annulment of marriage, or legal separation (reflected on a Form 1099), the amount is included in the tenant’s income.*

*Retirement Accounts

Balances in Individual Retirement Accounts (IRAs), 401K’s, Keogh plans and similar retirement savings accounts are considered assets if the money is accessible to the household.

  • 1.

    For employed individuals, accessible amounts are considered assets even if withdrawal would result in a penalty; however, amount that are only accessible only if the individual is retired are not included.

  • 2.

    For employed individuals, include only the amount that can be withdrawn without retiring or terminating employment.


After retirement, the amount received as a lump sum is considered an asset.


Revised October 2009

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