Is the sales of art owned by you counted as income?

[R and L 5]

We just realized that my husband might have put his income as asset in the I-864 form, where it is actually counted as income...

My husband started selling fine art in the beginning of this year.

The business is in such an early stage that he has no official business in records yet etc, but he is definitely going to pay taxes from the sales.

He has also the official sales receipts. And the amount he has sold is for 25K worth.

BUT the art is also originally owned by him as he inherited it.

So my question, please if somebody could help, is this money that he received from selling the art, income or asset??

He put it on the I-864 form as assets (didn't send the AOS package yet so he can still modify and re-do it if needed) but if it's actually income, then that's so much better for us as then we can meet the poverty guideline 125% with his income!

Please, would definitely be grateful from advice on this!!

[Done--Really 331]

It's a little tricky. If I recall, he is the USC, so in that case it should be reported as a capital gain (income) when he files his US tax return for the year the art was sold, but since it is not recurring income, it is unlikely to be counted as income for I-864 purposes unless he can show that it is part of a business and that the business will continue to operate once he moves back to the US. So, the cash he received (or what is left of it) is an asset in the bank or wherever it is, and the $25K MIGHT be treated as income if it is ongoing.

[pushbrk 13,498]

It's a little tricky. If I recall, he is the USC, so in that case it should be reported as a capital gain (income) when he files his US tax return for the year the art was sold, but since it is not recurring income, it is unlikely to be counted as income for I-864 purposes unless he can show that it is part of a business and that the business will continue to operate once he moves back to the US. So, the cash he received (or what is left of it) is an asset in the bank or wherever it is, and the $25K MIGHT be treated as income if it is ongoing.

Since the money has not yet been reported on a tax return, it is not YET income. However, the portion of the $25k still sitting in a bank account would be a current asset.

[R and L 5]

Thank you very much to both Magical and Pushbrk!! (F) (F)

Yes, it's tricky as in the beginning we though it's just simpler to put it as asset and keep it simple.

Now we called NVC and they said they focus on what's on the tax return from 2010, but that my husband can put the 25K amount as estimated income for this year.

And as read somewhere that first NVC looks at income, then assets and joint sponsors, then maybe it's still better to put the money as income, even though it's from 2011 only?

Selling art is not bringing same amount every month, so no, it's not recurring unfortunately, but then again my hubby has another painting that he has estimated (this is obviously asset) and that would also show, I assume, that the business is ongoing.

So maybe we still put the money as income, even though 2011 income is not on the focus the same as from 2010?

We'll also include our joint sponsor's details still, if he just kindly agrees to do it.

[Done--Really 331]

2011 income matters MUCH more than 2010--it is the estimate of your current income and that is the primary test, but if it is not recurring, then the embassy folks will give it a haircut or discount it altogether, so don't assume that the full $25K will be counted as income--it might be, but maybe not. And also list it as an asset because that is what it is assuming it is still in the bank.

[R and L 5]

2011 income matters MUCH more than 2010--it is the estimate of your current income and that is the primary test, but if it is not recurring, then the embassy folks will give it a haircut or discount it altogether, so don't assume that the full $25K will be counted as income--it might be, but maybe not. And also list it as an asset because that is what it is assuming it is still in the bank.

That's what we were so surprised when NVC replied that they look at 2010 tax return, and thought that doesn't 2011 income matter? But I assume NVC customer service has certain scripts that they read, which is understandable. Above all, GREAT that 2011 matters more than 2010! (Well my hubby still didn't pay much taxes in 2010&2009 as he was temporarily abroad a lot, but 2008 his earnings in the tax return are well beyond the poverty guideline, so he'll send them all the 2008, 2009 and 2010 tax returns.)

Yes, won't be leaning that NVC/embassy counts the whole 25K, but better that than nothing still.

So my hubby can put the 25K to both, to estimated income of 2011, and also on the asset section? Maybe he'll attach also a letter stating and clarifying that he put the 25K also as asset, but it's also his estimated income of this year 2011...I guess it's always good to clarify them the situation and then they can decide what they want, but at least they are aware.

THANK YOU so much again Magical! :)

[Done--Really 331]

No need for a special letter saying it is an asset...he will have to submit a bank statement and that is all that is needed for the asset side of things.

Also, it isn't the NVC that might give things a haircut--that is entirely up to the embassy.

[pushbrk 13,498]

No need for a special letter saying it is an asset...he will have to submit a bank statement and that is all that is needed for the asset side of things.

Also, it isn't the NVC that might give things a haircut--that is entirely up to the embassy.

I just want to add that if the sponsor is self employed rather than a salary or wage earner, it IS 2010 income that is stated as "current income". Employees can state their "current income" by anualizing it. Current year (2011) income is not the same as "current income". One could have earned, say, $60k by august and then be fired and not work the rest of the year. Their current income would be zero. On the other hand, they could have been hired July 1, 2011 at $120k a year salary after not working January through June. Their 2011 income would be only $60k, while their current income would accurately be stated as $120k.

Always remember that the affidavits of support NEVER ask for "current year" income. The ask for past years income and "current income."