> A bunch of stock is a source of income too, but it wouldn't be wrong to use some of it.

Normal US tax law that most people fall under says no, stock itself is not income. It's only taxed at the time of sale. If you ask for mark to market taxing then any increase in market value during the calendar year will count as income -- even if you didn't sell anything throughout the year. But usually those people are drawing a direct income from trading.

Yes, but I think these tests look at both income and assets (like stock). That is why people get dinged for owning assets, even if they are a source of income.