should i reposition assets to reduce high EFC

[vballmom]

<p>This information is from 2006, you can see if it has been updated.</p>

<p>

Occasionally a family will try to characterize a rental property as a small business in order to have it excluded as an asset on the FAFSA. For example, the family might own a vacation home which they rent when they aren’t using it themselves.</p>

<p>This situation is addressed in a margin note on page AVG-19 of the 2006-2007 Application and Verification Guide:</p>

<pre><code>At times a student or parent will claim rental property is a business. Generally, it must be reported as real estate instead. A rental property would have to be part of a formally recognized business to be reported as such, and it usually would provide additional services like regular cleaning, linen, or maid service.
</code></pre>

<p>This note mirrors the language from “How To Report Rental Income and Expenses” on page 16 of IRS Publication 527, Residential Rental Property (Including Rental of Vacation Homes).

</p>

<p>[FinAid</a> | Financial Aid Applications | Small Business Exclusion](<a href=“http://www.finaid.org/fafsa/smallbusiness.phtml]FinAid”>http://www.finaid.org/fafsa/smallbusiness.phtml)</p>

<p>See also <a href=“http://www.irs.gov/pub/irs-pdf/p527.pdf[/url]”>http://www.irs.gov/pub/irs-pdf/p527.pdf&lt;/a&gt;&lt;/p&gt;