<p>If real estate (ie rental property) is owned in the name of an LLC vs the parents name; is it considered for the EFC?</p>
<p>If the asset is your parents and is on their tax returns, then it is considered an asset.</p>
<p>Rental properties, when owned by the family, are typically counted as assets for FAFSA. It usually doesn’t matter if they’re in an S-Corp or LLC.</p>
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<p>And remember that in addition to the value of the rental property…the rents are included as income.</p>
<p>Thumper, the rent gets buried in Schedule E … by the time all is said & done, there are enough write offs to bring the income down to very little (and often it results in a loss). Many times, the AGI ends up so low that the asset doesn’t even get counted at a FAFSA school.</p>
<p>Thanks Kelsmom…most folks I know who have rental properties do so for the income…they don’t turn a loss. But I know that is not always the case. A lot would depend on what is ON that schedule E. We owned a rental property (a long time ago) and never had a loss on that property…even with depreciation, and expenses.</p>
<p>I am just so often surprised by what the rental income does to the bottom line AGI. The write offs people take blow my mind. I really see a lot of families where the income that is earned is offset by so many costs. I don’t know a whole lot about rental property, so I suppose there are probably a lot of other costs associated with it (mortgage, taxes, upkeep) …</p>
<p>Private schools often discount the write-offs.</p>
<p>It does not matter how it’s held, it’s an asset.</p>
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That wouldn’t make any sense.</p>
<p>^It would make sense, though, for them to add the depreciation back into the net income.</p>
<p>That and other expenses. It’s common practice.</p>
<p>Most rental properties produce a loss. If someone has a gain on one, they are extremely lucky. Everything associated with the upkeep, maintenance, etc of a rental property can be written off against the income. Not just interest, taxes and depreciation, but homeowner’s dues, utilities, painting, repairs and anything spent on the property. Things that are NOT deductible on your own home.</p>
<p>Righto…the above post…but that is why SOME SCHOOLS add those “losses” back into your formula. At the end of the day, the rental property and the rents have a value that can be reduced “on paper”. But the value of the property is usually higher thus the adding back in…</p>
<p>This is probably an issue with schools using the Profile and their own institutional funding than ones that use FAFSA only.</p>
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That and WHAT other expenses? You people are talking about two different things here - the income or loss on the Schedule E part of the tax return, and the net equity of the property as an asset. No one in their right mind would count ALL the rent received as income against you.</p>
<p>Our rentals have values and rental income that make our EFC too high…even with depreciation, etc.</p>