<p>Right-- family farms don't count as assets for FAFSA.</p>
<p>The land they don't live on would be a parental asset, but not at $100K. It would only be their equity in the land, the current value less the loans against the land. And even that would only be counted if above their asset protection allowance, probably around 50K.</p>
<p>ElenaHart-- did you list the $100K in land as a parental asset? Did you deduct any loans your parents have against the land.</p>
<p>If that's what is causing the $6K EFC, and if you and your parents can file short form 1040's, consider doing that to take advantage of the Simplified Needs Test, causing your EFC from assets to drop to $0.</p>
<p>OK-- that's where your EFC of $6K is probably coming from.</p>
<p>Find out what the real value of the land is (a conservative, not overly optimistic valuation -- what could you sell it for if you had to sell it quickly this week?). Then find the balance of any loans on the property, and make sure you deduct the loans from the value to get the current equity. The current equity is all your parents should be assessed for, not the full value of the property.</p>
<p>If they own the property outright -- no loans -- look into the simplified needs test. With low income, if you can file short form taxes, you can get the EFC from assets dropped to zero.</p>
<p>A familys EFC is the sum of a percentage of four factors: parents income, students income, parents assets and student assets. Under the simplified needs test, if the parents AGI is under 50K and the parents use a short form (1040A or 1040EZ), then two of the factors (parents assets and student assets) will not be used when your EFC is calculated. So, although it appears that your family may meet the simplified needs test (assuming they file short forms), this discussion about the farm and whether its a parental or student asset is irrelevant assuming your parents file a short form and their AGI is $25K, including the taxable IRA distribution of $7K. Did your parents indicate on FAFSA that they would file short form? If they file a long form (1040), do they really have to do this? Also, if your parents checked that they would file a 1040 on FAFSA, Im not sure if you FAFSA will let you change that answer. Does anyone know about this?</p>
<p>Secondly, you say that there are 8 people living in your house. Depending on the number of dependents with FAFSA, there is something called the Income Protection Allowance. Assuming that 5 of the 8 were treated as dependents for FAFSA, FAFSA automatically would exempt the first $26K of your parents income from your EFC calculation. (The parental Income Protection Allowance would be even higher if all 8 are dependent).</p>
<p>So, unless you made some error, of the 4 factors used to calculate your EFC, from what you said, 3 of them should automatically be off the table (parents income, parents assets and student assets). As to the remaining factor (student income), FAFSA would automatically use an Income Protection Allowance for the first $2700 of your income. Only your income above $2700 would be used in determining your EFC. Did you have income for 2005?</p>
<p>Well the farm always loses about 15,000 and my mom makes about 35000 so it averages out at 20,000 but our income taxes havent been filed yet. and their are 4 dependents in our house I believe this year. Also they file the long form, though I don't know why. Maybe because we use to have a high income but it will be lower this year because my mom lost her job in the middle of last year...
is that what you were asking for?
thank you everyone for all your help.</p>
<p>I believe that if you have a farm, you have to file the long form (for taxes) ....so that means Elena won't qualify for the simplified needs test. But if she and her family lives on the farm, then they don't have to include the value of the farm on the FAFSA (but she will have to for the Profile).</p>
<p>Depending on what schools you are applying to, they may ask you to fill out another form besides the FAFSA, called the Profile. The Profile is used at private schools and asks for more details than the FAFSA. </p>
<p>We are a farm family and our EFC appears to be pretty low on the FAFSA but much higher for the Profile as they will assess the value of our house and farm. If I remember correctly, you are applying to several state schools.....they just need the FAFSA.</p>
<p>Thakn you everyone for your help. My mother and I relooked at the FAFSA form and my EFC came down to about 3K much better! thanks again for all your help</p>