I own several properties together with my mother. We each own 50%. I report all rental income and expenses for them on my returns. How do I report these assets on FAFSA and/or CSS? Does reporting all income and expenses mean I have to report their value in full, or should I still report 50% of their value as my assets? I have to fill out both the FAFSA and CSS for my daughter and I can’t find a straight answer anywhere. Please help.
My opinion…if you are reporting the full rental income of the propeties on YOUR tax return…than all of that income should be reported on your financial aid forms as well.
Since you only own half of the properties…you would report 50% of the equity in EACH property as an asset on your financial aid forms.
But without knowing exactly how your taxes are being done…it’s sort of hard to say. For example…are you taking full depreciation and expenses on those rental properties?
@BelknapPoint your opinion?
Thanks for trying to help me figure this mess. To clarify, I report income, expenses and depreciation on all properties in my returns. I understand I will need to include all of it as I do on my returns. The part I’m confused about is reporting only my part of the asset ownership. None of the properties have mortgages. So, I will have to report the full market value for each. If all properties combined have a total market value of $500k, do I then report $250k in market value because I own only half? Is there a spot on the applications to specify partial ownership? I don’t want to be penalized for owning the full market value of all properties as my asserts if my mother owns half.
Remember that you own a partial interest, not a whole interest. The value of a 50 percent partial interest will be alot less than 100 percent of the market value.
@Zinhead that’s what he is asking.
I believe you will report your 50% of the value of these properties on your financial aid forms if you indeed own only 50% of the property. So…yes…$500,000 in value…1/2 is $250,000.
But since you are declaring all of the depreciation, etc…100% of that…this could raise questions about the ownership…so be prepared to document.
Hoping @BelknapPoint or @Madison85 can clarify this.
Again thanks for the responses. I’m ready to show deeds with both owners so documenting ownership is not a problem. So, I presume there will be a way to identify which assets are owned 100% and which are partially owned in the applications. Is there an organization that helps with filling out these forms? Or maybe a way of obtaining the forms prior to filling them out online? I’d hate to make a mistake on these applications.
Drafts of what? The FAFSA and Profile?
Why do you report 100% of the rental activity on your tax return?
Why are you reporting 109% on your taxes? Are you making a profit or a loss on your taxes for this? When you sell the property will you split it 50/50? I think that 50% is right for FAFSA assets. Your taxes are wrong, unless you have some sort of legal mgmt contract with your mother. That said, it is not the College’s job to audit your taxes. I am not sure that it will trigger a disconnect as they will not necessarily know that what is on your taxes is not 50%. Ethically, if you are increasing your tax loss, your aid may be wrong.
^If the properties have no mortgages, then it’s likely a profit. I don’t understand why you are structuring you tax returns like this, however?
Thank you all for the responses. I have reasons why I report all income and expenses on these properties. They are also not the only properties I own but my concern was that I didn’t know how to report them on the FAFSA and CSS applications. I am searching to find out if any or both forms have the option for reporting real estate assets with shared ownership. I haven’t had to fill out these forms yet and wanted to know ahead of time if there is specific ways to report this type of asset on the applications. This is why I also asked if these forms are available for review prior to having to fill them out and if anyone knows of a company or organization who helps with filling them out properly.
Sure, you can look at a FAFSA and see the questions. You can just fill out the form and never submit it.
I think the question on FAFSA is what is the value of your other (not the home you live in) real estate. You decide if it is worth $100k or $15k or $1M, and you decide how much of that you own (1/2). You report the income, and the form doesn’t ask if that is 100% of the income or 2%.
Owning outside real estate seems to be the FA kiss of death. If you own several properties with your mother and several others alone, are you really expecting a lot of aid?
As for companies that will help you fill out FAFSA and CSS, sure they exist. The tax software companies now have it as an option (and extra fee) when you complete your taxes online. I’m sure some accountants will do it (for an extra fee) when doing your taxes but they aren’t going to be experts in it unless they’ve completed them for their own kids.
Thanks @twoinanddone That’s a good idea. I’ll ask my accountant. He has college aged children so most likely he can help me. And I’m not actually expecting any aid or much at all but, my daughter is applying to elite private universities this coming fall so I have to fill them out regardless. It’s a requirement that both FAFSA and CSS are submitted regardless of income. Thanks again!
It’s not that hard. I also own ½ of an income property which has no mortgage. In the section on FAFSA which asks (worded differently) the equity you have in the property, I split the equity amount in half…to show the amount I own. We also split all income and expenses, but that’s another line on the form (and since you receive all income and take all deductions, you would list the full amount you receive in income and the full amount you are taking for deductions on that other line. The form doesn’t ask about partial ownership, etc. You do the math. It isn’t difficult or complicated.
My kids applied to “elite private universities”. We ran the financial aid estimators- realized we wouldn’t qualify for any aid- so did not fill out FAFSA or CSS. Nobody asked us our income- we just declined to fill out the forms. I have never heard of a college requiring a financial aid application from everyone- this seems awfully intrusive.
Which colleges now require everyone to apply for aid???
I’m sure the Obamas didn’t fill out FAFSA or CSS, nor the Bush, Clinton, or Trump families.
We are not Obamas, Bushs, Clintons or Trumps.
But we did plug in the numbers and ascertained that it wasn’t worth filling out the forms.
Maybe it’s a mistake on my part and I presumed it was required since all the schools have it under their application instructions. Also, on college board I got the impression that it was a standard thing for everyone to fill them out. I any case, it’s obvious I will need some prior guidance for any forms that may be required or not.
Really? Do tell? I know of NO elite schools that require the fafsa and Profile forms to be completed…unless. Student wants to be considered for need based aid.
Sorry…but I just don’t believe this is true.
What schools require this??
My kid had to complete a fafsa and Profile,for Boston University in 2003 and 2004 for disbursal of merit aid…but most folks do not consider BU to be an elite school.
ETA: if your income exceeds $200,000 a year, and you also own secondary real estate, you probably won’t be getting any need based aid…so,this could be a very moot discussion!
@thumper1 please read the reminder of my responses. I have clarified that I may have made a mistake and generalized/presumed when mentioning that I was “required” because I’ve seen these applications as part of the documentation needed for college application processes. Ive also come across them many times in the instructions and guidance in college board. Furthermore, saying “elite” wasn’t meant to spark sarcasm or any kind of hostile responses. This discussion was started simply to ask if anyone knows whether there’s a section in either or both of these applications to specify partial instead of full ownership of real estate asserts. I haven’t yet filled out these apps before and I was merely seeking information from others who have.