<p>Hello, I have a fafsa question. I am the cusodial parent, just submitted the fafsa, son applying to schools in the fall of 2013. I sold my home in 2011 and it showed as 43k income on my tax return. My actual income from work was only 2,700. I have no other assets and I usually make less than 10k a year. I understand the new residence equity is irrelevant. I guess my question is, how do the colleges interpret this on the fafsa? Should I explain in writing to each of my son's prospective colleges that the 43k was a one time capital gain from the sale of the residence? Or, is it a non-factor? Much of the 43k was rolled over into upgrading the new residence, but not sure how that applies or if it's relevant. Any advice would be appreciated. Thanks.</p>
<p>If you sold your home in 2011, it should not appear as income in your 2012 tax returns which is what the 2013-2014 FAFSA is based on. Which FAFSA did you file? Both the 2012-2013 (which would have asked for the 2011 tax figures) and the 2013-2014 forms are both active now.</p>
<p>Happy mom,
Thanks for your kind response. You brought my error to light. I applied for the 2012-13 fafsa and I should have used the 2013-14 one based on a freshman applying this fall. Do you agree?
Thanks!</p>
<p>Yup! If your child is entering school in Fall 2013, the 2013-14 FAFSA is the one you’ll need.</p>
<p>If you didn’t have a $293k gain on the sale of your house, and you’d lived in it at least two years, and you’d never rented it out, consider that your 2011 return may not have been prepared correctly.</p>