<p>How do CSS and FAFSA evaluate the value of investment assets? Is it based on value before or after income tax?</p>
<p>For example, I have some stock options expiring soon. The options are fully vested and are in the money. When I exercise the options, the brokerage firm will automatically withhold about 1/3 of the gain for income tax purposes. Can I use the after tax value of the stock options when filling out the CSS and FAFSA forms?</p>
<p>Assuming after tax value is allowed, different tax rates will apply to my stock options, restricted stock units, and standard stock shares. I assume it's up to me to calculate the appropriate after tax value for each asset class. Correct? Thanks.</p>
<p>Before tax. Any taxes will show up elsewhere as taxes paid…</p>
<p>If I don’t sell stocks until a few years from now, how do I show taxes paid? Thanks.</p>
<p>Since the value of the investment for financial aid purposes is the value of the stock in the market on the day you file your FAFSA/Profile, taxes don’t even enter into this at all. You don’t owe the taxes until you sell them. That your brokerage firm is so kind and takes a cut right away to hold for the taxes doesn’t matter at all.</p>
<p>This actually brings up another question relating to timing of filing the applications. If I file a CSS application in late November for EA schools and then the market value of my investment increases considerably because of a good run of the stock market, do I need to update the CSS? Thanks.</p>
<p>It would be perfectly fine for you to contact a college or university that offers EA and requires the CSS Profile, and ask how it is done. We have not gone through that process, so I can’t speak to it. It is my understanding that the CSS Profile that is filed in the fall is to get a guesstimate for financial aid, but that a new one must be filed in the spring with corrected numbers.</p>
<p>Hi, I’m new here, with a HS freshman, just trying to plan ahead, if possible…so do you have to include the value of vested and non-vested stock options? It doesn’t seem like you should have to include non-vested ones, since if my DH leaves the company before they vest, we get nothing. Also, does the type of stock option make a difference?</p>
<p>Good question.</p>
<p>Take a look at the notes accompanying the “Federal Formula” and “Institutional Formula” calculators at [EFC</a> Calculator: How Much Money for College Will You Be Expected to Contribute?](<a href=“College Board - SAT, AP, College Search and Admission Tools”>Calculate Your Cost – BigFuture | College Board) and see if this is discussed. The current version of the FAFSA Formula is at <a href=“http://ifap.ed.gov/efcformulaguide/attachments/010512EFCFormulaGuide1213.pdf[/url]”>http://ifap.ed.gov/efcformulaguide/attachments/010512EFCFormulaGuide1213.pdf</a> so you can run your numbers through that on paper. The staff at the FAFSA website itself are good at responding to questions too.</p>
<p>The most important thing to remember is that very, very, very few colleges will actually meet what they determine to be your family’s financial need, and of those that do most will still include loans in that package. Chances are there will be a gap between the aid package and your need. This means that you need to define what your family considers to be affordable, and work from there rather then from what you think the college/university might come up with in an aid package.</p>