Question about FAFSA and investments

<p>My parents have told me they have very, very little investment money. Most of it is in a couple retirement accounts, some in two Roth accounts, and about $5K in stocks. </p>

<p>I know the stocks will count in FAFSA, but are retirement accounts and Roth accounts counted?</p>

<p>IRAs, Roth IRAs and 401ks are not considered assets available to pay for college and are not reported on FAFSA.</p>

<p>From $35,000 to $60,000 in assets, depending on parents' age and number in college, will be protected. The $5K in stock must be reported, but will not increase your estimated family contribution.</p>

<p>No, official retirement accounts- IRA, 401k, etc are not included in assets. Money they may have set aside for retirement, but not actually in a legal retirement account would count</p>

<p>just to clarify, money that they put into tax deferred accounts is added back in, A Roth IRA is not in this group.</p>

<p>I have $$ put into retirement accounts with from income and do NOT pay income taxes on that, but it is added back into fafsa.</p>

<p>When requesting a FAFSA Pin, is it in the student's soc sec # and name or the parents? </p>

<p>Am leaning toward going ahead and getting the Pin now for 2008 taxes.
Thanks!</p>

<p>Both. You need a PIN for the student and a PIN for one of the parents.</p>

<p>Good idea to get the PINS well in advance. We filed FAFSA late for my son (because he suddenly decided to go back to school and we had not applied for FAFSA the first time round) and had problems with his PIN (already had the parent one for my daughter) which were frustrating to deal with when we were running late in the process as it was.</p>

<p>Thanks for the response. So, I can request both Pins using S' soc sec and H's soc sec. The beauty of the internet, anonymity when financial things online!</p>

<p>I have heard enough horror stories from friends about filling Fafsa out, I am not sure I want to do this, but one of S' schools require it. So I will take the leap and request Pins.</p>

<p>It is not really that hard. Make sure you meet all deadlines. You can use estimated tax figures if your taxes are not completed them early then update later. </p>

<p>Just make sure that if you you use a tax program to do your estimates you remember to update the figures to the real ones before you file your taxes. Not that I did anything as silly as forgetting to adjust some numbers to reflect the real numbers :rolleyes:</p>

<p>IFAP</a> - Information for Financial Aid Professionals</p>

<p>you can run your numbers through the formula</p>

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<p>The balances IN the accounts do not count as assets. BUT the amount your family contributes for the tax year for the FAFSA you are doing is added back in as income. So if you are doing a FAFSA for the fall 2009-2010 school year, you will be using your 2008 taxes. The amounts contributed to these retirement accounts in 2008 will be added back into your parents' income. Example...if your parents contributed $5000 to their retirement accounts in 2008, that $5000 will be added back in as income. BUT the $5000 IN the account is NOT listed as an asset.</p>

<p>I am trying to find out if an ownership interest in a LLC (Limited Liabilty Company) which owns real estate must be included in FAFSA submittals.
Anyone know?</p>

<p>Yes, it must be reported.</p>

<p>Reporting LLCs - wouldn't that fall under the rules for any family-owned business? If the family owns > 50% of the LLC and the LLC employes fewer than 100 people, this wouldn't be reportable on FAFSA would it? It would be reported on Profile as any other business.</p>

<p>vballmom,</p>

<p>I think you are right, see the following, especially section C, subpart (c).</p>

<p>The small business exclusion was established by section 8019(c) of the Higher Education Reconciliation Act of 2005 (HERA 2005) as part of the Deficit Reduction Act of 2005 (P.L. 109-171, February 8, 2006). The specific amendment is as follows: </p>

<p>(c) TREATMENT OF FAMILY OWNERSHIP OF SMALL BUSINESSES. -- Section 480(f)(2) (20 U.S.C. 1087vv(f)(2)) is amended -- </p>

<ol>
<li> in subparagraph (A), by striking "or"; </li>
<li> in subparagraph (B), by striking the period at the end and inserting "; or"; and </li>
<li> by adding at the end the following new subparagraph: </li>
</ol>

<p>"(C) a small business with not more than 100 full-time or full-time equivalent employees (or any part of such a small business) that is owned and controlled by the family.".
After this amendment is applied to section 480(f)(2) of the Higher Education Act of 1965, the legislative language becomes:
With respect to determinations of need under this title, other than for subpart 4 of part A, the term "assets" shall not include the net value of -- </p>

<p>A. the family's principal place of residence; or
B. a family farm on which the family resides.
C. a small business with not more than 100 full-time or full-time equivalent employees (or any part of such a small business) that is owned and controlled by the family.</p>

<p>batsman, thanks for posting the full rules. </p>

<p>I think the question above was about an LLC, and if it's treated the same as a family-owned C or S corporation. Since the rules aren't specific about the exact type of businesses covered, I'm assuming that all types, including LLCs and unincoporated sole proprieterships, would be considered small businesses. This nicely avoids the difficulty of valuing this kind of business, which is something I'm struggling with on the CSS Profile form.</p>