<p>My Mom inherited money after her father died November 2010. She will be putting the money into a retirement annuity. Is that money included on the CSS PROFILE question PI-225D under "Any other untaxed income and benefits"?</p>
<p>Where is the money now? </p>
<p>Where was it in 2010? </p>
<p>Did she receive the actual inheritance distribution in 2010?</p>
<p>I meant to say he died in 2010, NOT 2009.</p>
<p>The money has been in a “liquid holding account” with a licensed investment advisor, until a specific investment is decided upon.</p>
<p>I hope Thumper comes here…I think she knows a lot about these kind of things…</p>
<p>I’m not really sure. The amount you contribute to the annuity in 2010 will be added back in as income but since it’s an inheritance, I would guess it would be untaxed income (as inheritances are not taxed unless they are above a certain amount).</p>
<p>Has the money already been transferred to your mom’s name?</p>
<p>* The amount you contribute to the annuity in 2010 will be added back in as income *</p>
<p>So, would the concern be that either this year or next year, the “family contribution” will be high (depending on when mom gets/got the money) because of the “contribution will be added back,” so the family should prepare for that? Otherwise, the family could get socked with a one-time huge EFC and no means to pay it. Is that right?</p>
<p>There is a limit to what you can contribute to an annuity each year. </p>
<p>I’m really not sure where this student would put this money. It depends on where the money came from. For example, was it IN a tax deferred annuity and it’s being transferred to her mother? Or is this a lump sum that is now being put in an annuity?</p>
<p>But the big question is whose name is this money in right now?</p>
<p>I don’t know a lot about inheritances…I DO know a lot about trusts :)</p>
<p>The money is in my mother’s name, in a money market account. So far she hasn’t had access to it. She intends to use it for retirement, so doesn’t want it all to go to “family contribution”.</p>
<p>If the money is in her name in a money market account you have to report it as a savings account. Your mother can’t say she wants to use it for retirement. It will be counted as an asset for FAFSA. No way around that.</p>
<p>It won’t ALL be tapped for college expenses. Assets (savings accounts for example) are tapped at about 5.6% of their value each year AFTER the amount that is protected. Parents have asset protection…the amount varies depending on things like the oldest parent’s age.</p>
<p>If the money is in a money market fund, it is listed on the FAFSA as an asset.</p>
<p>The FAFSA is interesting this year. The asset protection allowance is computed for you, and you are asked if you have assets that total more than $X. If no, you check No & that’s it. If yes, then you enter the amount. So you will know that asset protection allowance without having to hand-calculate it.</p>
<p>It sounds like the money is not protected and will get counted. I’m not sure if it will kind of get counted twice…once as “untaxed income” and again as a savings/asset. Is that how it will work? </p>
<p>How much asset protection do parents have? Is it different for CSS Profile schools?</p>
<p>Are your parents married? </p>
<p>Did your mom get the money in late 2010…or early 2011?</p>
<p>Is the amount more than -say - $50k?? $100k?? More???</p>
<p>You and your family need to be talking about how this is all going to affect your financial situation and school. </p>
<p>What schools are you applying?</p>
<p>Did you apply to any financial safety schools?</p>
<p>How much will your parents contribute each year?</p>
<p>Once “received”, I had to report my inheritance as unearned income. For me, that was not the year my dad died, but the year after, because of the timing of probate. I also had to report the money as an asset. I was told to report the amount of money “left” on the day I filed FAFSA. Since I had used some to pay down medical bills, the asset amount was less than the unearned income amount I originally received. I believe there was some paperwork that was used for taxes as well (1099 or something) and I guess the colleges saw that. I had two kids in college at the time and both schools had us do it this way. Since we reported the inheritance to the schools, it seemed to us that they used professional judgement because although it did raise our EFC, it did not affect our EFC as badly as we expected.</p>