<p>Hello,</p>
<p>I’m new to this forum. My daughter is a junior. I was planning on converting my liquoid stocks to a low performing CD ($47000…$ from divorce settlement 8 years ago) to avoid capital gain for the base year. From what I’m reading I would have to do this by Dec 31st (her base year being jan 1st 2013-dec 31st2014). Should I do it?? </p>
<p>Single mom with income just under 80k, but capital gains may put me over.</p>
<p>Good question for the Financial Aid Forum, so you may want to re-post it there. [Financial</a> Aid & Scholarships - College Confidential](<a href=“http://talk.collegeconfidential.com/financial-aid-scholarships/]Financial”>Financial Aid and Scholarships - College Confidential Forums)</p>
<p>Financial Aid is based most heavily on income, and as a single parent with income in that range, need-based aid is not going to be good. Run the Net Price Calculators at the websites of several colleges and universities that your daughter is likely to target, so that you can get a notion about which factors affect the aid, and so that you get a clear heads-up about how much the colleges and universities will expect you to pay. You also should print out the FAFSA formula and work through it on paper using several different scenarios. here is the link: <a href=“http://www.ifap.ed.gov/efcformulaguide/attachments/091312EFCFormulaGuide1314.pdf[/url]”>http://www.ifap.ed.gov/efcformulaguide/attachments/091312EFCFormulaGuide1314.pdf</a> The formula does change a bit from one year to the next, but this will give you an idea.</p>
<p>Your capital gains aren’t taxable income until you sell the stock. Do you plan to sell some each year to help pay for college? In that case, you don’t want to put it all into one giant CD, you would be better off to put it into several smaller ones and cash them out as needed. Under the FAFSA formula, you do have an asset protection allowance based on your age and marital status, above that allowance, assets are assessed at 5.6%.</p>
<p>Oh…Thanks…Ill post it in the financial aid & scholarship section.</p>
<p>Last year the capital gains I had to report was $845 dollars…it is performing bettter this year</p>
<p>I left the divorce $$ in stocks their for college, emergency, or whatever the kids need…I would cash some in each year to help my daughter pay for college. If I do the CD, I wouldn’t do one giant one. </p>
<p>I have been busting my hump to make a decent income, now realizing I may make too much for daughter to receive grants and such. Thanks for your advice.</p>
<p>To be perfectly honest, making good money is better than being broke enough to qualify for grant aid. There just is not that much out there. You would have to be nearly desperately poor to qualify for a full Pell Grant, and that is only $5,550 a year. Would you really want to sacrifice your career potential over the long term so that your kid can get an extra $20k?</p>
<p>Take a look at your budget. Decide how much you can pay. Then, sit down with your daughter and tell her how much that is. If her dad is ready, willing, and able to commit to a certain figure as well, then add that to come up with the baseline figure. Talk with her about how you feel about student loans, and about how much you expect her to chip in each year out of her own savings and earnings.</p>
<p>Once you know how much you can pay, and you have run some NPCs to know how much the colleges are likely to expect you to pay, you and your daughter will have a much better idea about how deep and far she will have to dig in order to find her safety schools, and she will understand better how to select her matches and reaches.</p>
<p>Wishing you all the best!</p>