If the income of the owner or the combined income
of the owners of the property for the income tax year immediately
preceding the date of making application for exemption exceeds the
sums provided by this article. "Income tax year" shall mean the twelve-month
period for which the owner or owners filed a federal personal income
tax return or, if no such return is filed, the calendar year. Where
title is vested in either the husband or the wife, their combined
income may not exceed such sum, except where the husband or wife,
or ex-husband or ex-wife is absent from the property due to divorce,
legal separation or abandonment, then only the income of the spouse
or ex-spouse residing on the property shall be considered and may
not exceed such sum. Such income shall include social security and
retirement benefits, interest, dividends, total gain from the sale
or exchange of a capital asset which may be offset by a loss from
the sale or exchange of a capital asset in the same income tax year,
net rental income, salary or earnings, and net income from self-employment,
but shall not include a return of capital, gifts, inheritances or
moneys earned through employment in the federal foster grandparent
program and any such income shall be offset by all medical and prescription
drug expenses actually paid which were not reimbursed or paid for
by insurance, if the governing board of a municipality, after a public
hearing, adopts a local law, ordinance or resolution providing therefor.
In computing net rental income and net income from self-employment,
no depreciation deduction shall be allowed for the exhaustion, wear
and tear of real or personal property held for the production of income.
