<p>Loss on Schedule C (self-employment), Schedule F (farm income), and losses from Sub-chapter S corporations are all ways (and there are more…) that this happens. The income or loss on those does not necessarily correlate with the cash that is actually withdrawn from the business.</p>
<p>I would guess that this OP wants to know how a negative income will affect financial aid. </p>
<p>I’m pretty sure that the lowest EFC is $0. EFC cannot be in the negative numbers…if that is what the OP wants to know.</p>
<p>It is not so cut & dried. The EFC may not be 0 in this case. Different schools treat paper losses differently, depending on their policies. The fact is, paper losses are tricky. I am willing to bet that the ivies are used to checking into the facts behind such cases. If there is no income, how is the family living? How are the bills being paid? There is a rental building. How does that come into play in this particular situation? These are things the school will probably delve into. They will probably request further information from the family. It is entirely possible that this family will come out with a O EFC, but there are no guarantees. Simplified need & automatic 0 EFC will not come into play here (the business keeps that from being an option).</p>
<p>I just want the OP to realize that we cannot tell what the EFC will be. Only the college can, and only with all the required info. If you want to apply ED and you are worried about finances … you really need to contact the school and speak with them directly.</p>
<p>For federal aid, though, the EFC would be zero…regardless of how the school looks at the information. IM can change other aid factors but not Pell grant eligibility or state aid.</p>
<p>BUT even with FAFSA, some schools (like UCs) will add back paper expenses such as depreciation and home office deduction. If there was a large equipment purchase being taken the adjusted income may go way up</p>
<p>Never mind — I am getting my threads mixed up!!!</p>