Q & A: IRA Income

Question:  Can you give us some guidance on calculating an IRA?  We have an applicant that has an IRA account that receives a $500.00 deposit into the checking account every month.  The current value on the IRA is $100,241.64 after penalty deductions.  Do we count the $500 per month as income and not list the IRA value as an asset or do we do both?  Lisa in NC

Answer:  The rule about retirement accounts (including IRAs) is that, once the tenant begins regular withdrawals, the withdrawals count as income and (POOF!) the asset disappears.  The tenant’s income from this IRA would be 500 x 12, and the cash value of the asset would not appear on the cert at all.  This is true whether the regular withdrawals are monthly, annually (including required minimum distributions) or in any other regular, periodic time increment.