<<<<<so…how is="" that="" showing="" up="" ??="" considered="" income?="" how="" much="" did="" you="" sell="" the="" business="" for?="">>>
Haven’t done taxes yet but it was pretty much a wash. Sold it for a little more than I paid for it and had an operating loss last year. Why do you ask?</so…how>
<<<< Do you really need $10K aid from Davis?>>>> What kind of ridiculous question is that??? I would like to get as much assistance as possible in paying my son’s tuition. Doesn’t everyone? It does look like I will lose it this year because of the timing of my house purchase. But next year I will qualify as that money will be invested in my primary residence. But what the heck, maybe I just won’t bother applying next year since I may not “really need it”.
Need: If you don’t get $10,000, will you need to take a Parent Plus loan? Will the student need to withdraw and attend community college or take a year off and work?
Does Davis guarantee to meet financial need?
I am guessing here, but although owning 2 houses at the time you file FAFSA sounds pretty bad, it’s probably better than having that $100k sitting as cash. At least there is debt against the new asset.
That said, you should probably seek the advice of a financial professional who is well versed in both taxes & college financing.
“If you don’t get $10,000, will you need to take a Parent Plus loan?”. I haven’t looked at all the options, but a home equity loan may be a good choice as they run about 4% or less these days.
If you sold a business, won’t that show on your taxes as income?
I suppose I don’t understand how FAFSA (a free application for federal student aid for low income familes) relates to people who can lay their hands on 6 figures of cash (be it $100k or $999k). It appears to me that you have a large chunk of change that you’re dumping into real estate, letting the good people of CA help fund your child’s education, after which you can downsize and put that cash toward your retirement. So no, I don’t get how having 6 figures worth of cash qualifies you for need based aid.
There is a difference between needing the aid and wanting the aid.
For FAFSA purposes, to reiterate, your primary residence is not considered an asset. You have two homes, the one that is not your primary residence will be assessed at 5.6% of market value after your asset protection allowance has been applied to your assets.
The simplest way to reduce that impact if you can do it, is to take the maximum loan against that new house, so that its net market value is as low as possible. But then you have that 6 figure down payment in cash, don’t you, which will be an asset?
If you just bought the house for $350K with $100K down payment you can claim that the available equity is now below 100K as you would have to pay the closing costs and real estate fees if you sell it right away.
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Haven’t done taxes yet but it was pretty much a wash. Sold it for a little more than I paid for it and had an operating loss last year.
Why do you ask?
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Well, because otherwise it would be income/profit and would increase your EFC as well.
You’re extremely lucky to find some person to fork over 6 figures for a business that seems to not only not make money, but operates at a loss.
Can you sell the ice cubes to Eskimos, too?
I think you can opt for a bunch of “pay it forward” closing costs… prepay the real estate taxes on the house you are buying, pay for necessary repairs, home inspections, etc. for both properties, etc. I get that you are “stuck” with two houses showing up as assets, but a house can suck up a lot of cash… to reduce any other assets you might have. I know whenever we’ve bought something there have been items up for discussion prior to closing- give the purchasers a discount of $500 off the price, or fix the leaky gutter now. You might want to draw up a list of these items and figure out if it’s worth paying down any cash balances you might have just to plough as much money as possible into the real estate transaction.
Have you knocked off the costs of title search, real estate brokers, legal fees, etc?
Re: post # 21. What people are trying to explain is that its not your definition of " need" ( as you said, everyone would like as much assistance as possible) its the school’s determination of your need. And with the business sale, the cash for the new house, etc, you may simply not qualify this year… Or at least not for as much as before.
We had a situation like this while my kids were in college. We were relocated due to a job change. The company gave us relocation expenses which showed up as income but really weren’t as they were expenses.
As I remember, I sent all of the documentation to the school and explained it. The university could choose to do what it wanted with that information. We did pay more that year. It seemed unavoidable.
Another option is for your child to take a year off school. It’s not ideal but when there is a one year where there is a one time payment and circumstance to make the cost go way up, it can be done.