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Impact that realized capital gains has on FAFSA

Razle1Razle1 0 replies1 threads New Member
I am a 2nd year undergrad who has been recently getting into stocks. I fortunately was able to learn how to trade relatively quickly from people who I consider mentors. Now that I realize that trading can be an actual source of income, I would like to know if / how much my capital gains will affect the amount of FAFSA / Pellgrant I will receive in the future.

Some information that may help answer this question:

My mom is divorced has two dependents ( my brother and I)
She does not have any assets
I qualified for a Pell Grant last year
I make around 450 a week from trading
This year will be my first year I have ever filed for taxes
I currently go to a community college that costs ~$7000-8000 a year excluding grants/scholarships.
I currently have a 3.982 GPA

Another question if it is possible to answer:
I am wishing for a transfer to UofM. If my hopes of this were to happen, would I still be able to qualify for The U-M Go Blue Guarantee?

Information about The U-M Go Blue Guarantee for those who are not informed about it:

" U-M will pay full undergraduate tuition and mandatory university fees for up to four years for students:
who are eligible for in-state tuition
who are eligible to apply for financial aid
that have family incomes of $65,000 or less and assets below $50,000 (as well as tuition support for some families earning more)
who are pursuing their first bachelor’s degree "

https://finaid.umich.edu/go-blue-guarantee-eligibility/


If any other questions are needed I will try my best to answer them.
Thank you for taking the time and reading this long post.



edited August 4
6 replies
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Replies to: Impact that realized capital gains has on FAFSA

  • cshell2cshell2 1134 replies12 threads Senior Member
    edited August 4
    Capital gains will be income for you on your taxes. How much it effects your taxes depends on several things. For instance, if you qualify for an Auto-Zero EFC based on your mother's income then it won't effect it at all. If you don't, student income is hit the hardest of anything on the FAFSA at 50%. But, there is an allowance of $6840 that is protected, so you can make that much in a year without it counting against you.

    Here is the actual formula if you want to work through it yourself.

    https://ifap.ed.gov/sites/default/files/attachments/2019-10/2021EFCFormulaGuideOct2019UpdateAttach.pdf
    edited August 4
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  • thumper1thumper1 78841 replies3558 threads Senior Member
    How much it effects your taxes depends on several things. For instance, if you qualify for an Auto-Zero EFC based on your mother's income then it won't effect it at all

    I think @cshell2 has a typo here. Your capital gains will affect your taxes.

    How much they affect your financial aid is another story. Auto zero EFC has nothing to do with taxes...at all.
    · Reply · Share
  • cshell2cshell2 1134 replies12 threads Senior Member
    thumper1 wrote: »
    How much it effects your taxes depends on several things. For instance, if you qualify for an Auto-Zero EFC based on your mother's income then it won't effect it at all

    I think @cshell2 has a typo here. Your capital gains will affect your taxes.

    How much they affect your financial aid is another story. Auto zero EFC has nothing to do with taxes...at all.

    Yes typo.

    Capital gains will be income for you on your taxes. How much it effects your EFC depends on several things.
    · Reply · Share
  • blossomblossom 10550 replies9 threads Senior Member
    How much do you have in assets (i.e. not the capital gains, but the total sum of your investments)?

    I realize you won't take my advice- but rapid trading for a low income kid is not a sound financial strategy. I'm going to guess your mentors have all the "basics" of a safe financial strategy BEFORE they trade- six months income in a money market account for example.

    You realize that one bad week in the market can wipe you out?
    · Reply · Share
  • Eeyore123Eeyore123 2186 replies25 threads Senior Member
    If you are making $450/week at 1% weekly return (a HUGE return) that implies you have $45,000 in assets. If you are so confident in your “system” you should just compound up your gains. Then FA is no longer concern for you.


    The more likely scenario from you taking these risky bets is that capital gains will not be an issue for you.
    · Reply · Share
  • SybyllaSybylla 5117 replies61 threads Senior Member
    edited August 4
    Define "making". Is this all liquid profit now or an abstract notion?
    edited August 4
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