<p>I'm not sure how to count rental properties on the FAFSA form. I know that individual ones are supposed to be counted as Investments, but what if they are grouped under a Sole Proprietorship? Can I count this as a small business?</p>
<p>i have a similar question; should i go to a school that i got accepted in but pays a high tuition, or go to a safety school that's not as good but i get a free ride in?</p>
<p>I was just about to ask this. My parents own different properties that they rent out to people. What are they counted under?</p>
<p>Also, does anybody know if they hurt the amount you can get from FAFSA?</p>
<p>FinAid</a> | Financial Aid Applications | Small Business Exclusion</p>
<p>Read the info on rental properties. Notice that if the Schedule E is filed, the property is listed as an asset on the FAFSA. This does not mean that filing a Schedule C means it doesn't have to be listed as an asset, though. Remember that the value of the is the market value of the property less any outstanding mortgage amount owed on the property.</p>
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Business or Farm Debt </p>
<p>If a business or farm does not qualify for one of these exclusions, the net worth is reported as an asset on the FAFSA. There is a separate question for such businesses and investment farms, as the net worth is adjusted to shelter part of the value of the asset. </p>
<p>The net worth is calculated by subtracting business or farm debt from the current fair market value of the business or farm (including the falue of land, buildings, inventory, equipment, machinery and livestock). To be considered a business or farm debt, the debt must be secured by the business or farm. If the debt uses something else as collateral, it does not offset the value of the business or farm. </p>
<p>For example, if the family used a home equity loan to capitalize the business, the balance on the loan may not be used to reduce the fair market value when computing the net worth, as the loan is secured by the home, not the business. The family could ask the college financial aid administrator to use “professional judgment” to allow the home equity loan to offset the business value. However, most colleges will not allow such an adjustment because the debt was not restricted to use for the business. Also, the value of the family’s principal place of residence is excluded on the FAFSA, making it difficult to justify allowing a debt against the home to offset other assets. </p>
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<p>If I use the home equity loan to buy a small business, I can not reduce the balance from the price I spent? Is that right?</p>
<p>Yes that is right. Only a debt directly against an asset may be used to reduce the value of that asset. For instance if you had a margin account loan against a stock account it would reduce the value of the stock account. Or if you had a second home or rental home then you could reduce its value by any mortgage against it. But if you borrow against your primary home to finance a business the debt is against the home, not the business. You cannot reduce the value of the business by the debt against the home. And, of course, the the primary home is not a reportable asset on FAFSA anyway.</p>
<p>Thanks,swimcatsmom
==================If a business or farm does not qualify for one of these exclusions, the net worth is reported as an asset on the FAFSA. There is a separate question for such businesses and investment farms, as the net worth is adjusted to shelter part of the value of the asset. </p>
<h1>The net worth is calculated by subtracting business or farm debt from the current fair market value of the business or farm (including </h1>
<p>These paragraphs are talking about a business which does not qualify for one of these exclusions. A business with less 100 employers does not need to report in FAFSA.
Is this mean I can no mention this business at all? Or I have to explain it? BTW, I’m a canadian. I have to file the PROFILE,it need more information.
I’d better to stop to buy a new business at this time. Sad</p>
<p>If you are Canadian you are not eligible to file FAFSA anyway. All these rules relate to FAFSA, not CSS. For CSS you have to report your primary home as an asset.</p>
<p>Thank you swimcatsmom.</p>