A little confused...

soxfan99
Tue, 29 Mar 2011 08:34:12 +0000

There are a number of factors that impact the answer to your question. You really need to talk to a financial advisor to get the best advise.

Any inheritance tax would have been paid when the money was moved into the account for you, so that probably does not apply. Whether it was taxed would depend on the amount of money and the state you live in.

Depending on the investments in the account you may be earning income (via dividends or interest). If the “account” is a trust then the trust may be reporting and paying the taxes on that income. If it is not a trust, but a personal account, then you would be reporting this income for tax purposes, and it is something that would be on the FAFSA.

If you do sell the stocks then the profit from those sales is income - capital gains if the stock has been held long enough. This income would be reported on the FAFSA. You do not receive income (except for dividends) from stocks until you sell them.

If you go to (or will be applying to) a school that requires you fill out the CSS profile, then the value of this account would need to be reported as an asset.