Stock options and aid?

Paying for College
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<p>I was talking to someone the other day about job things, and the subject of stock options came up. I'm talking here about the kind of speculative "If we ever IPO, this is how many options you'll get" stock option grants that are often a part of compensation/salary offers for start-up companies in Silicon Valley. Often times, they're just a nice way of saying, "We wish we could pay you more, so take these pretend shares in our company in leiu of money, because we don't have much of that." </p>

<p>So, here's my question. Are these income? I'm wary of them, but the friend I was talking to felt strongly that because a company may not have an IPO, the options are basically not income and can't be declared until they have real value. Anyone ever have to put these on the FAFSA or Profile? How do they affect it? I worry because I'm sometimes offered contract work for options only (no actual money) and I avoid them because I worry they will affect our EFC without giving us anything to pay an increased EFC with. </p>

<p>Again, this isn't about stock grants in a company that is public, but for "pre-IPO" (aka NOT public) startups and small companies. I've had several jobs in the past that granted them, but the company went under or I was laid off before they ever had any meaning or value.</p>

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<p>If something can't be counted on a 1040 form, I don't think it could be counted on FAFSA.</p>

<p>My BIL was the CFO for a national company and I think all his raises were " pretend"- they eventually went bankrupt.</p>

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<p>Yeah, I have gotten raises that were like, "This year, we're giving you 10,000 more options!" Yay! Worthless paper! :-)</p>

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<p>As far as I know a stock option isn't income until you exercise the option.</p>

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<p>
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As far as I know a stock option isn't income until you exercise the option.

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</p>

<p>True. It's better to convert assets to income a full year before you have to start filling out FA forms. Assets receive more favorable treatment with respect to EFC.</p>

<p>A stock option might be an reportable as an asset if it is exercisable and has value. Anyone know for sure?</p>

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<p>there are ways to "value" options for public companies, BUT, for pre-IPO companies, they are essentially worthless. Thus, unreportable on Profile as an asset nor income.</p>

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<p>Right- even I know that much ;)</p>

<p>For example- my BIL talked both my mother and my grandmother into putting thousands of dollars into shares for his pre IPO company.</p>

<p>Which of course were worthless six month later.</p>

<p>I've learned a lot over the years- just 16 or so years ago, I attended a school auction where shares/stock from ICOS was offered & I had to ask what an IPO was .</p>

<p>It might have been right before it was actually public, it was acquired in 2006 for $2.1 billion by Eli Lilly.</p>

<p>Anyway- some gambles work out ;)</p>