IRS Publication 501 defines gross income as "all income you receive in the form of money, goods, property, and services that isn't exempt from tax. If you are married and live with your spouse in a community property state, half of any income defined by state law as community income may be considered yours.  Florida is not a community property state. 

 

Most people understand that earned money is income but do not realize that, especially for purposes of bankruptcy, income can be several other things.  If the item is listed below, it is considered income with some exceptions.  The list is not exhaustive.  If you question whether or not something is considered income, you should as your bankruptcy attorney.

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1.  Earned Income.

Whether you receive money for services in the form of a paycheck or as payment to you through your small business or self-employment, the money received is income.

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2. Fringe Benefits and Perks. 

Reimbursed moving expenses, use of an employer provided vehicle for personal travel exceeding a value of $315 per month, free stuff like use of sports tickets, and paid sick leave.

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3.  Substantial Gifts. 

Small gifts, for example, those given for birthdays or holidays, are not considered income.  However, regular financial contributions to household expenses, larger cash gifts and gift of large items or property is considered income and this includes moneys paid directly to your creditors.  Receipt of substantial gifts added to income calculations could disqualify you from bankruptcy based upon the Means Test.

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4.  Lawsuit Settlement or Award. 

Some or all of proceeds from a settlement, depending upon the reason for the proceeds, is considered income.  For example, reimbursement for lost income and punitive damages would be included as income whereas reimbursement for an injury and pain and suffering for that injury would not be income.

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5.  Interest & Dividends. 

Whether it is interest on your bank account or certificate of deposit or dividends received from investments, it is considered income.

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6. Profits.

If you sell something for less than you paid for it, there is no profit.  However, if the item appreciated in value and you made a profit from the sale, that is income.  This includes real property as well as sales on eBay, Etsy, Craigslist and other sites.

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7. Alimony.

Designated alimony payments, whether temporary, bridge-the-gap, or permanent, are considered income.  Regular payments designated as "equitable distribution" are not considered alimony.

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8. Barter.

Whether you exchange services for services or property for services, the value of those services or the property received, whichever is greater, is considered income.

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9. Life Insurance & Annuity Payments.

Any proceeds received from any life insurance policy or annuity is income.  Sometimes, annuities are created to distribute settlement proceeds; in this instance, if the proceeds used are not considered income, the payments are not income either.

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10. Employment Related Payments From Employers.

Severence pay, accrued leave payments, sick pay, and life insurance premiums more than $50,000 are all income.

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11.  Free Money | Free Stuff.

Lotto winnings, gambling winnings, prizes, and awards, and found property are all income.

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12.  Trust & Estate Distributions.

Any property or cash received as a bequest after someone has passed away is considered income.  Likewise, distributions received from a trust are considered income.

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