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Winning the Lottery

GreenDayFanGreenDayFan Posts: 3,928Registered User Senior Member
Okay, so My Dad won the lottery, and I had a question about how it is going to affect my financial aid for next year..

On FAFSA, I know that whatever money he has leftover from his winnings has to be claimed as assets. Does it also have to be counted as income too (in addition to his salary)? I know if it's an asset we only have to pay 5.6% of that, but if it's counted as a one time income for that year wouldn't it be almost counted twice as an asset and income? Can anyone clarify how this would work
Post edited by GreenDayFan on

Replies to: Winning the Lottery

  • swimcatsmomswimcatsmom Posts: 14,942Registered User Senior Member
    if it's counted as a one time income for that year wouldn't it be almost counted twice as an asset and income?
    That's exactly how it works. Just like if you earn over the protected income and save some of it, then the saved part gets counted as income and as an asset.

    I believe Financial aid officers sometimes make special circumstance adjustments for such one time events but they are usually things more like insurance pay outs when a spouse has died. Not sure if they would do so for a lottery win. My logical brain says not , but my logic and the federal governmental logic are often not aligned too well. May be worth asking I guess - the worst they can say is no (hopefully a financial aid officer can chime in here).

    Congratulations to him on the win by the way.
  • 3bm1033bm103 Posts: 3,537Registered User Senior Member
    Or he could consider using the lottery winning for your education. Just a thought.
  • merryechomerryecho Posts: 336Registered User Member
    Of course it makes a big difference how much he won. If it is a significant amount, welcome to the 'paying full tuition' club. It might come as a shock.
  • GreenDayFanGreenDayFan Posts: 3,928Registered User Senior Member
    3bm103 he is using a great deal of it for my college education but he also has debts to pay and other things to put it towards, though I'm assuming you just said that to be rude. And it was 500k but he is splitting it evenly with his financee who bought the ticket that he scratched, so he'll have 175k after taxes prob?
  • swimcatsmomswimcatsmom Posts: 14,942Registered User Senior Member
    The amount you will have to report for FAFSA will be the before tax amount - $250,000. I don't think you will be receiving any need based financial aid for the 2010-2011 school year.
  • merryechomerryecho Posts: 336Registered User Member
    I would expect that the half that he gives to his fiance will still be counted as HIS income. Sorry, but given a choice, all of us paying full tuition have "other things to put it towards".
  • CalreaderCalreader Posts: 1,027Registered User Senior Member
    Merryecho, if she bought the ticket they probably co-own it. He didn't give her half; it was hers already.
  • TheMan777TheMan777 Posts: 685Registered User Member
    Actually - technically she bought it, so shouldn't she own it? On top of that he isn't married to her and it only affects her and not him on paper. You may not even be effected. O_O one of the flaws of the government.

    Basically she can give him the money needed to pay for your college education and than hold it in her own account claiming it as her own.

    I wouldn't know I am not an expert as this, but DAMN that is like a dream come true!
  • swimcatsmomswimcatsmom Posts: 14,942Registered User Senior Member
    Bit risky - they are not married. if anything happens it is her money. I wouldn't risk it. and if the money won is all in her name she will probably be taxed at an even higher rate. Plus if she gives him the money to pay for college then there may be tax repercussions such as gift tax (depending on the amounts involved).
  • ThatPoshGirlThatPoshGirl Posts: 550Registered User Member
    I would expect that the half that he gives to his fiance will still be counted as HIS income. Sorry, but given a choice, all of us paying full tuition have "other things to put it towards".

    All they have to do is say they agreed to split whatever winnings before he scratched it. Then he will only be taxed for the half. Anytime you win money in a lottery if you have a pre-arranged plan to split the money with someone the taxes are only on what you get. Sometimes you have to prove the plan was in place. But if she bought it, and he scratched it, that's pretty good proof.
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