^I’m not sure we know the rental arrangement, since there are houses with in-law setups (or mother/daughter houses as someone called them - not a term I’ve heard around here) which have 2 kitchens, but are still considered essentially single family houses.
Or…in a high value real estate area, each bedroom with kitchen privileges could rent for $1000 a month.
True, but the way this student describes the following situation. They had a good income, they paid off their 1900 sq ft home, health issues caused a huge drop in income, and they had to rent out half their home to get by.
My home has separate “guest quarters” with 2 Br, bath, living room, full kitchen, and laundry, separate entrance (roughly 1000 sq ft), but if I ever rented it out (I dont), I would not say that I’m renting out part of my house. It appears that these people are literally renting out part of their home…perhaps parents in one bedroom, kids in another, and renters in the other couple of bedrooms.
That said, I think the business, the partnership, etc, is what’s keeping them from getting more aid.
>>>but we got selected for verification this year)>>>>
Will the school take another look at how the information was presented last year or is that all done and dusted? It doesn't seem that this arrangement is just recent, nor is the home ownership. Again, was last year's FA award based on the same information? Or is verification the actual problem? Did adults fill in the information last year?
@thumper1 My parents have 0 in retirement accounts, literally 0. Also selected this year for reservation. And yes I know I’m really late but to be fair deadline was April. I have a non 0 fafsa efc but it’s a much smaller number. My story was the same last year, nothing changed. On fafsa, half of the house didn’t appear because it already contributed to AGI and no where asked about it. I mean I sent them the entire tax return with all the forms so I don’t know how we can hide anything. Verification meant I had to input directly from tax return on fafsa (I forget what it’s called) which I found funny because they have my parents’ literal tax return. But anyway that was what I suspected–I think MIT is charging our house and taking a percentage of that. I just wanted to see if anyone had experience with this situation/can confirm.
@mom22girls last year was 35k, but I think this year is going to be ~45k if my calculations have correct assumptions. And yea you’re right, we are not getting much in rent, it’s just the value of business and portion of house that’s rental.
@Sybylla first verification this year
@thumper1 I’m assuming they wrote off part of tax as expense or something, it’s around 5k tax. We’re not renting much. It’s enough for my parents to live for retirement because they don’t have any money for retirement otherwise. With regards to putting half of house on fafsa, there really wasnt anywhere that asked. CSS did. But anyway this thread confirmed my theories, thanks.
@CTScoutmom I totally forgot about devaluation. My parents did talk about that at some point–thats probably how the AGI is so low. But also, in our location the rental income:house value is super bad. It’s roughly 3% of house value if we rented our entire house out. The housing costs are out of control where I live but rent is still cheap-ish.
@thumper1 sorry if story doesn’t make sense to you but trust me, a 1 bedroom here is ~600 usd and that’s normal price. Yet the house is 1m+. Source: I have collected rent for my parents many times. Honestly what we should do is NOT rent the house next year because the rental income is a lot less when compared to 4-5% of 500k+
@mommdc I think next year I’ll get my parents not to rent to house, we’ll probably save ~10k a year
@Sybylla my parents dont really read or speak much english so nope, I do it every year. We had family who were in rough times a couple years ago and we let them live in our house for free so weve been renting out our house for only a couple of years, and tax returns requested are always 2 years back
@mom2collegekids i think because for tax year 2016 it actually said 50% is rental property, which raised eyes in f.a. office and then they are taking some percentage of it. 2015 we didnt rent so in 2017 when i submitted 2015 tax returns it didn’t come up.
Oh yes there is…it’s in the asset section where they ask for real estate but make it clear that it’s NOT your primary residence. The portion of your home that is rented…that %of the equity should have been listed there.
That rent for 2019 (which is next year) will be used for the 2021-2022 FAFSA. If you started college in 2017, you will already have graduated by that academic year. NOT renting in 2019 won’t do you a speck of good.
@thumper1 Well at the time I didn’t even know that half the house can be primary residence. And good point about not renting. Brainfarted there.
@traindude1 I suggest you discuss this directly with FA office. But first I’d try to get a better handle on the business and tax structure by discussing with your parents or their CPA. The fact that you say your parents ‘may have mentioned something about devaluation’ suggests that you don’t yet have a grasp of the big picture (nor should you as a college student, except that you need to clarify FA). Once you do, a conversation with a FA counselor should be helpful.
And as your parents “don’t really read or speak much english”, the fact that they are talking about the devaluation aspect belies the idea they are helpless babes in the FA woods. DO they have a CPA handling this? Otherwise as above, get everything in order to talk with FA. Get ready for plan B for paying this year.