Viewing a single comment thread. View all comments

sin-eater82 t1_jefsz08 wrote

I would go with B.

This is why, and I think this is as reasonable of a reference point as it gets outside of some clear cut definitions from creditors. Consider if these were retirement accounts and how income is reported.

If the money was coming out of 401k/IRA/etc. accounts, you'd say your income that year was 50k. So I'd report what you get out of it on average.

That said, I have no idea how they would want you to properly account for it. Although, I feel really confident that it is not option A.

1

DrRobertBottle OP t1_jeg5bfo wrote

I happened to be on the phone with my credit card company and I asked them what they thought. The CSR put me on hold for 5 minutes and told them they are not financial advisors and they can't give me advice on how to answer that question. I'm trying to answer their question accurately and they can't give me additional details on it. To be fair, it's not the bank's question but a Federal rule/guideline.

I could make a case for any of the answers. I'm going to investigate how public companies report their income from unrealized capital gains. It might not be an apple to apple comparison

1

DrRobertBottle OP t1_jeg68af wrote

Interesting. I found this article and it states:

>Unrealized income or losses are recorded in an account called accumulated other comprehensive income, which is found in the owner’s equity section of the balance sheet. These represent gains and losses from changes in the value of assets or liabilities that have not yet been settled and recognized.

They interchange income and gains. So income are gains and gains are income. Now, I'm leaning towards answer A since capital gains are income regardless if they are realized or not.

1

sin-eater82 t1_jeg7a08 wrote

Hmm, I mean, I would never lean that way. I can't realistically have negative income next year. That's just not a thing. You can have losses if you look at it that way. I don't think that's really the spirit of the question at all.

As for what you found about businesses, I mean, you're not a business. It's a vastly different context.

It's a weird one. That said, there must be "an answer" somewhere. You're not the only person living off of investments afterall.

1