<p>Think of it this way - the FAFSA would consider similar one-time events such as an inheritance, a lottery win, or a straight cash gift as income, correct? Even if it was spent (on a car, a vacation, or in this case, a house), the $8000 income was still real. That’s a free $8000 that didn’t come from his savings or earnings.</p>
<p>The FAFSA shouldn’t care that an equivalent amount was spent; they’re simply trying to calculate the savings and the true cash inflow to that family. This would be an example of pure cash inflow.</p>