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Sale Of Business


Leroy

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Dear Brothers,

I have a friend who is 50% ptsd, he is worse than that. He can't operate his business anymore, and must sell it. If he receives money, in the form of payments, will that income put him in the employed category, thereby mitigating his desired claim of unemployable??

Thank you,

\Leroy

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Leroy

I think it has to be earned income to hurt his chances for IU. If he sells the business that would not be earned income. If he worked the business then that would be earned income. It is like getting money from stocks and bonds which is not earned income. If you sell your house and make money on the deal that is not earned income.

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Guest DON20906

Sale of a business may be counted as substantially gainful employment because of Faust v. West. Because VA regulations do not define the term “substantial gainful occupation,” the Court of Appeals for Veterans Claims has had the task of interpreting this regulatory term as part of its review of BVA decisions that have concluded that the veteran is capable of performing a substantial gainful occupation. In Faust v. West,13 Vet. App. 342, 356 (2000). In this case, a veteran was challenging a reduction in his TDIU rating for a psychiatric disability pursuant to 38 C.F.R. § 3.343, because the VA concluded that the veteran was capable of engaging in a substantially gainful occupation. the Court adopted a definition of a “substantially gainful occupation.” The Court concluded that a substantially gainful occupation, is “[an occupation] that provides [the veteran with an] annual income that exceeds the poverty threshold for one person, irrespective of the number of hours or days that the veteran actually works . . .” Mr Faust was IU for PTSD at 70%. Before he decompensated, Faust had a thriving insurance agency. After he stopped working and his business failed he continued to collect residual sales commissions and he claimed that the money should not be counted against his IU because it was unearned.

Leroy

I think it has to be earned income to hurt his chances for IU. If he sells the business that would not be earned income. If he worked the business then that would be earned income. It is like getting money from stocks and bonds which is not earned income. If you sell your house and make money on the deal that is not earned income.

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I don't think sale of a business is earned income, but this should be settled by a CPA. Sale of stock is not earned income. Sale of house is not earned income. It is investment income or passive income.

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Guest frank
Dear Brothers,

I have a friend who is 50% ptsd, he is worse than that. He can't operate his business anymore, and must sell it. If he receives money, in the form of payments, will that income put him in the employed category, thereby mitigating his desired claim of unemployable??

Thank you,

\Leroy

LEROY i would say no, because this is not erand income, frank
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