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You need to find out what your parents entered on Line 17 of their 1040 tax return last year. This is the net gain or loss from the rental operation. If they are not making money from the rents, they may have had a loss, in which case the rents will not hit you too hard. Schools are NOT going to just count all the rent you get and not the expenses that went along with it.</p>
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Yes, that’s the way it is with investments. Believe me, it hurts just the same whether you lose tons of money in the stock market or in rental units. We’ve all been crushed over the last decade; that is, everybody except Universities, government, and the health care industry :)</p>
<p>@ hoosiermom,
I’m a direct admit to Kelley Business School - that’s my fallback. As much as it pains me to think that i’ll be just another Willy Loman, i can’t say no to the promise of the program. lol</p>
<p>And another conundrum for the rest of you:</p>
<p>Line 17 of our 1040 from last year was pretty high, but it had nothing to do with our assets in real estate, rent, etc. In a freak occurrence last year, my dad had a big hit with a settlement case, which skewed our numbers enormously as far as i can tell. Conversely, this year, my mom is predicting that we’ll show losses on our taxes. </p>
<p>Will financial aid be determined from last year’s numbers, or this year’s, if we get our taxes done quickly enough?</p>
<p>Your financial aid will largely be determined by your income and such in the year 2010. If the settlement happened in 2010, it will count on this year’s tax return. If you have any of the money in the bank still…it will count as an asset.</p>
<p>If this all happened in 2009, some Profile schools (in particular) may wonder why some of that settlement money (if the amount was large) wasn’t put aside for college expenses. Some Profile schools will ask for your income from the PREVIOUS year (2009) as well as the current one (2010) and the next one (2011).</p>
<p>If you are dealing in a FAFSA only school and this money settlement happened in 2009, the school will not hear about it at all (no place to put that on the FAFSA) unless some of the money is IN a current savings account. If that is the case, the asset will be assessed at 5.6% about of its value.</p>
<p>Remember that colleges assume you will pay from past earnings (savings), present earnings (income) and future earnings (loans).</p>
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In that case, you want the total amount taken from the Schedule E (rental gains/losses), in order to see what effect that income will or will not have.</p>
<p>You say that IU is your safety. Does that mean that your parents will pay the full cost for you to go there (minus any merit that you get)?</p>
<p>at this point in time, my tuition at IU is covered for 4 years, and that’s liable to increase (applying for additional merit scholarships as we speak) . All that’s left is room and board, fees, whatever. That’ll be another 10k a year, but i’ll have money coming from various other local scholarships to help with that.</p>
<p>^^^</p>
<p>Local scholarships are for freshman year only. What about the other years?</p>
<p>Sometimes a sucking chest wound on paper has positive cash flow after disregarding depreciation expense.</p>
<p>We submitted a CSS Profile, and it did not ask for the depreciation expense. Perhaps they assume one based on the initial cost, but that would be erroneous since other things have been added to the base cost since the purchase. (Presumably their “guess” would be lower than the actual.)</p>
<p>my community actually has a trust set up for students who complete 50+ hours of service. it’s an automatic 2k a year for 4 years. that’s just to name one scholarship. therer are other such opportunities as well.</p>