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A living trust is still reported as an asset. Only if you made it an irrevocable trust for which neither you nor the student is the beneficiary would it be excluded. And that would cause more problems than it would solve. If any of the $$ is for college, you might consider splitting it between the kids' 529s since you only report the student's 529 on their FAFSA. Alternatively, Roth IRA or retirement contributions could help to move some of this off your balance sheet. Keep in mind that if you have embedded gains in these positions and sell them to fund 529s or retirement accounts, that will increase your income if it's a FAFSA year (anyone past Jan 1 of sophomore year of high school).

All assets that count on the FAFSA are counted at 5.64% of their value. That includes checking & savings accounts.

Yes, that gets included. You use the net value of the real estate-- market value minus outstanding mortgage debt minus current liabilities (this year's expenses) minus cost of sale.

Great question! There isn't a ton of guidance on this. I've seen recommendations ranging from "put the amount you have in your business bank account as the value" to assuming an actual value (for a service biz this is typically a multiple of earnings) less all outstanding liabilities-- any debts and all projected expenses for the current year (your income, business expenses, taxes, rent/lease if applicable). My recommendation is that however you come up with that number, just put a note somewhere in your files so that in the event your FAFSA is pulled for verification you can explain how you came up with that number. Note that most schools that require the CSS Profile will request your business tax return anyway.

You can absolutely transfer funds between your children's accounts as an asset planning strategy. However, each transfer is treated as a rollover and you're only allowed one rollover per year per account. So you'll need to consider when and how much you'll need access to each year as part of this strategy.

Only if it flows through to your personal return (1040). Otherwise you only report the C Corp's value (your share of it) as an asset.

If you are still your sibling's dependent (or were on their 2023 taxes), then you could use their info. Dependent means they're providing more than 50% of your financial support. If you are your parents' dependent, then consider appealing your financial aid on the basis of a one-time transaction (selling the property) that is not indicative of their ongoing financial circumstances.

@@howtopayforcollege I was their dependent for 22 and one other year. I don't remember which other year, but I will check for 23 as well. Do you happen to know how the appeal works? I will be talking with the financial aid office at my school, but they aren't always very useful for fafsa info, if at all. Would it even be a good idea to ask them these questions with the info I've provided? The last thing I want is to get wrong information from the school considering how stingy they can be. It's a UC, if that helps with understanding why help isn't always easy to get.

@@tacoman107 You appeal through the financial aid office. They'll be able to tell you the specific steps to take. The main element of an appeal is, there is some info that they don't have which you can provide which could result in a higher aid award. Whose dependent you are, the nature of income you've (your parents/sibling whose dependent you are) received, etc. are You're right that UCs are pretty stingy. The other place you might want to look is the Cal Grant.

If your income is <$60k and you meet a few other requirements (limited/no self-employment income, do not file a Schedule A, B, D, E, F, or H) or receive maximum Pell grant or another means-tested federal benefit, you do not report assets. If that is you, the asset portion will simply not appear on the FAFSA. If you do meet those criteria and are still prompted to report assets, it likely means one of two things: 1) your state offers grant aid and requires assets to be reported or 2) this year's FAFSA has a lot of issues

@howtopayforcollege thank you. In that case, I am a self employed filling schedule c with AGI about 55k for a family of 6 and some interests and dividends, I have to list my assets? My kids might not get anything at all.

Technically yes-- you report the balance in the account on the day that you file. If it's a significant amount that will be spent soon/is already allocated, you might choose not to. Know that if you get pulled for verification, you could be required to produce statements in which case you'll need to explain it. So keep records of what you're reporting and why.

Yes, you list your bank account balance in assets where it says checking, savings and cash. Business value is listed separately.

Your savings would count. Your children's survivor benefits do not count as income. If they are being saved then the balance in the savings account does count. If the savings account is yours, then the total amount goes on the FAFSA as a parent asset. If each child has their own savings account, then you only put the balance of each student's account on their FAFSA as a student asset. Example: You have $3,000 in savings and each child has $2,000 in savings. On student #1's FAFSA, you enter your $3,000 as a parent asset and student #1 enters their $2,000 as a student asset.

thank you@@howtopayforcollege

​@howtopayforcollege how is VA Disability income treated???

It's nuts trying to figure this out, right??? I'd suggest using your estimate of what you'd get if you sold it. Net of commissions, taxes, etc.

It's the student's so yes, moving it to the 529 would be beneficial for the FAFSA.

Is it possible that you're below the income threshold for the simplified formula where you don't have to report assets? If so, then the parent asset questions don't appear. Income threshold is $60k.

Cash is included. Sorry!

Yes, you can claim it for yourself as long as you qualify-- income under threshold, undergraduate, haven't already claimed 4 times. Details here: www.irs.gov/credits-deductions/individuals/education-credits-aotc-llc#:

You can also subtract current liabilities (coming year's expenses incl mortgage, property taxes, etc) and cost of sale.

@@howtopayforcollege can you clarify please? 300k property value - 200k mortgage loan = 100k. Then 100k - 5k property tax = 95k?

@@bwc2000 $100k minus all liabilities for the year-- property taxes, mortgage payments, maintenance, and cost of sale (assuming realtor commission and taxes due).

You are correct that a small percent of a large number is still a large number. If you have options to move this money into retirement accounts that would benefit you in the formula. Of course, how much you'd be able to move is a function of how many years you have until college since there are annual limits. Alternatively, look for colleges that offer merit scholarships instead of need-based if you have assets or other items that will disqualify you or limit your access to need-based aid.

@@howtopayforcollege Thanks for the response!!

thanks!!!

Yes, although keep in mind that if you are applying to any schools that require the CSS Profile, you'll still need to report both 529s there.

If you claim him as a dependent on your taxes then you include him as a member of your household. There's a category of dependents other than children on taxes.

I meant first 4 years

@@jrgo155 So.... the IRS website www.irs.gov/credits-deductions/individuals/aotc says "To be eligible for AOTC, the student must: Be pursuing a degree or other recognized education credential Be enrolled at least half time for at least one academic period* beginning in the tax year Not have finished the first four years of higher education at the beginning of the tax year Not have claimed the AOTC or the former Hope credit for more than four tax years Not have a felony drug conviction at the end of the tax year In your case that gets into definitions of "finished the first four years of higher education" and does part-time community college attendance for four years meet that definition. If you are not eligible for the AOTC, you could still be eligible for the Lifetime Learning Credit. It's not as beneficial, but it's not nothing. I'd suggest that you consult a tax professional.

Roth IRA isn't an asset so it doesn't get reported. Since Roth is after-tax, it's already included in your income on your tax return so doesn't get added back as a pre-tax contribution would be. To contribute to a Roth, you need either earned income or an ex-spouse with earned income.

Q1: 1/2 the net value-- subtract mortgage and other current liabilities (property taxes, maintenance, cost of sale, etc) from market value. One-person businesses are not reported on this year's FAFSA but will be next year. Same goes for business value: subtract liabilities and cost of sale from value of business to get net value.

Unfortunately the rental property is an asset that gets reported. (Note that your tax return info will include the rental income.) You do report it at its net value-- market value minus outstanding debt minus current liabilities (the coming 12 months' expenses) minus cost of sale. So it's possible that it won't be as big a hit on your FAFSA as might be the case.

Only if it's a discretionary contribution from you. If it's an employer contribution or nondiscretionary withholding from your paycheck, it's not reported.

Here's the language from the FAFSA: "rental property (includes a unit within a family home that has its own entrance, kitchen, and bath rented to someone other than a family member)." You might take that to mean that any property occupied by a family member is not a rental. Worst case, you have to explain the situation.

Assets are only valued on the day you file the FAFSA. You do not provide transaction history, just balance by category. So no, nothing suspicious about moving things around.

@@howtopayforcollege so I wouldn’t be able to transfer some of the money from my bank account to my parents bank account since I already submitted the fafsa? My assets are high to a point to where I’m no longer eligible for aid, but if I transfer the money to my parents bank account, supposedly I’ll be eligible, according to the fafsa aid estimator.

@@ericcabrera8239 You can do it and appeal your aid award based on the new information. Adjusting your award is at the discretion of the school but there's no harm in trying.

Easiest is to go to my website, howtopayforcollege.com, visit the blog area and submit a comment on a blog post.

It uses the older parent, so it's $4,700.

You'll need to contact your school(s) to update your information. Unfortunately there isn't a way to capture this on the FAFSA so it's a manual process.

The only 529s that are reported on the FAFSA are those owned by the custodial parent. The CSS Profile does ask for for all 529s for which the student is the beneficiary regardless of owner (grandparents, etc.). In addition, most Profile schools ask both parents to report income and assets.

@@anngarcia6014 Thank you!

Depends on when she would enroll in college since the FAFSA is for specific school years. If she is starting in winter/spring 2022, then yes, do the 2021-22 FAFSA. If not, only 2022-23 is needed.

Yes, you report them. Crypto is classified as a commodity; commodities are reported. Your assets are reported as of their value on the day you file so if you own them when you file, you report them.