When property is sold during the 6-month exemption period, consider net proceeds from the sale of the property as a nonexempt asset. If net proceeds from the property sale combined with other nonexempt assets do not exceed the asset limit, eligibility continues without an overpayment.
When figuring the net proceeds from the sale of property, deduct any mortgage balance, or selling costs, such as realtor fees, closing costs, current year's taxes, etc. If the client uses monies received from the sale to repay DHS, also deduct that amount from the net proceeds.
When the net proceeds from the sale of the property plus other nonexempt assets exceed the asset limit, the case is ineligible. The net proceeds from the sale are an asset and not income. An overpayment exists for the amount of cash benefits paid during the 6 months that the value of the property was exempted. The amount of the overpayment is the lesser of the net proceeds minus the asset limit or the amount of cash benefits paid. If the client repays the amount owed, there is no overpayment.