<p>so my grandparents gave me $2000 in bonds and I could use the money, but need to work this summer if I could ever find a job. This summer I plan to make 3K but still want to cash the bonds as It will help me alot. What i was told that if I put these bonds into my checking or savings account they will be considered income and My total would then be around $5000. I don't want to cash the bonds then only be able to work for $1000 as that would be a complete waste of productivity for the summer. Any suggestions.</p>
<p>I am no expert on bonds but they are assets not income. Even if you cash them I think only any increase from the original purchase value would be income - not the whole value of the bonds.</p>
<p>changing the form of an asset from a bond to cash will not count as income. It is the actual receiving of the bonds from the grandparents that will count as income -- there is a section where you list other income and it could go under this. </p>
<p>Honestly -- $2000 isn't exactly a ton of money and many kids get christmas presents and graduation presents in the form of cash and don't declare it on FAFSA or Taxes. It might not be entirely above board, but I would suggest you cash the bonds and not worry about declaring them. If they money is not spent by the time you file FAFSA next year, the assets will hurt your EFC -- but not by much and it will probably be gone by then.</p>
<p>But my financial aid is very sensitive, give or take a hundred dallors or so I can loose it all.</p>
<p>also Ive never gotten $2000 birthday or Christmas gift, usually around $20, but I dont put this in my checking account or it is not taxed. Ya see the bonds are taxed which means the bank must report the sum of the interest of the bonds and the bonds themselves to the IRS. Which makes me not able to just cash the bonds.</p>
<p>My brother made 5000 and his efc doubled. This is what Im scared of.</p>
<p>If the bonds are in your name then FAFSA will consider them an asset and 20% will be considered available for your EFC if you still have the bonds on the date you file your FAFSA. If you need the money for expenses and it will be spent before you file FAFSA then that is $400 that your EFC will be lowered by (assuming you had the bonds when you 1st filed FAFSA). If you still have the bonds then that $400 will be in your EFC. </p>
<p>How much of the bonds are profit? That is the part that will be considered income and will be taxable. If the bonds cost say $1500 and are now worth $2000 then only the increase in value, $500, is taxable.</p>
<p>One way or another they will be considered by FAFSA - either as an asset @ 20% of whatever you still have on the date you file FAFSA and/or as income if you sell them.</p>