I saw a post below about a small business owner and rental property owner worried about financial aid and I’m in the same situation. If deductions are minimal and there is not much equity, am I ok? My parents own a business, but less than half(so asset counts on fafsa right?) However, gross income is about 40-50k with their business stake is worth about 100k, the building is rented not owned. The rental property has very little equity and either breaks even or makes a few hundred if only mortgage is taken into account. I just don’t understand how the stake in the business can be counted. If the stake was sold to pay for college, there would be no income! Am I screwed or will the little equity and minimal rental income allow me to get significant aid due to slightly low gross?
Business with less than 100 employees is not counted on FAFSA. However the rental property is counted as investment asset. What is the equity value on the property? Your family income/asset will include: net income from business + net rent profit from rental property + equity on rental property.
CSS Profile schools do not have that “less than 100 employees” not counted.
the business, its assets and its value all count on CSS Profile.
The total value of the stake is 100k. How much of that can i expect to be added to an efc? Also most of the income is from salary as an employee, so not sure if that helps. The equity in rental is about 40-50k. Will the net price calculators be fairly accurate for my situation?
No. The net price calculators will not be accurate.
The rental property the other poster was talking about was a separate building/business. It sounds like you are saying your parents rent the building they run their business from. If so, that is not rental income, but actually a business expense.
Or are you saying they own other property they also rent out?
The business building is rented and there is a seperate house which is a rental property.
The equity in the separate house they rent out will need to be included and will count as an asset.
Are you saying your parents are renting the building for their business from another owner? They don’t own that building? If so, the rent they pay is a business expense.
Sorry I wasn’t clear before, the house is rented out and they pay rent for the business. I know the business rent is an expense. Is there a certain amount of business value and second home equity that is added onto EFC? So if the equity is 50k how much extra would be added onto an EFC?
For FAFSA that’s 5.6% assuming you are already over the asset protection allowance.