My 1040 form for 2015 lists a rental that was reported to IRS under my name in 2015. This was a place I bought for my old parents in 2014 and managed it temporarily until the previous tenants moved out. Then I gifted this place to an irrevocable special needs trust for my parents and they live in it now. So for all practical purposes this asset is not available to me or my kids. How can I explain it to the colleges?
The gift took place before I filed FAFSA. But the colleges will see it on the 1040 form.
I’m thinking that the colleges may ask for the trust documents. Am I right? Is there a way for us to avoid exposing the trust in this way?
Yes, I owned it in 2015. The beneficiaries are my parents - 77 and 76 years old, disabled, with no income of their own. I didn’t list it on the FAFSA or CSS profile form, However, this may come up in review and I need to have an explanation ready should this ever come up. I feel that sending the trust document to the colleges might be excessive. Is there any other way to explain to them that the asset was always intended for the purpose of supporting my parents? Special needs trusts are regulated and cannot be used for anything else other than the needs of the beneficiaries.
If you no longer own it…it is not an asset of yours.
I’m going to think this is like owning a second home. You owned it in 2015 so it would have been an asset THEN. But if you sold it before you filed the fafsa, it would no longer be an asset of yours.
Make sure you have proper documentation of this property transaction…every bit of it. You may be asked to provide this information to the colleges because it was on your tax form, and is no longer an asset.