<p>My parents only income comes from one rental property. The FAFSA asks you to include the net worth of all investments (including rental property).</p>
<p>What do they consider the net worth of rental property? Is it the value of your house if it were sold or is it how much money you get from it?</p>
<p>Do I even include it in investments if it is already in the income information for tax in the FAFA because it's my parents' only income?</p>
<p>Yes, you include it in investments; the net worth is the amount you can sell it for minus the amount of money still owed on the mortgage on the property (if the property has not been paid for in full).</p>
<p>Any income producing asset gets a double whammy in that the income has to be listed and the asset as well. The value of the apartment building is what you parents could get for it, net of expenses, if they had to sell it very quickly. The best thing to do, IMO is to get three local commercial realty firms to give you what they think you can get to unload the thing in 30 days. Average the results and that will give you back up. And, yes, the net income as reported for taxes as such is what has to be reported. Your family is getting use of that money. And if push came to shove, the have the building to sell. Why should they NOT have to report the income and assets?</p>
<p>^Would they have to report the asset value if it were a fishing boat used for the family business?</p>
<p>If it’s a business for which they have to list the value (100+ employees, etc.), then it would be included there. If it’s a small family business for which they’re not required to report a business value, then the boat would not be listed.</p>
<p>^And yet, cpt’s question still applies:</p>
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<p>The small business exception is one that never made sense to me because of the way investment real estate is viewed. I’ve known several families that have gotten hit with that issue. There is a difference between a small business being run, and owning investment properties. Not saying it’s fair. Not fair that single parents gets less than half of the asset protection that married ones do. Not fair that kids with a jerk of a parent who won’t pay are on the hook to pay what he won’t. Not fair either if a family invest money in antiques that are used to furnish the home including pricey carpets and other such items. Just the way it works. Some properties are counted and some are not. The fishing boat is not,but the building is.</p>