<p>On advice of others with FAFSA experience, have stopped contributing to UGTMA acct for daughter. But since this account still “counts” as her asset, I’d like to liquidate or reduce those funds for another educational purpose to limit exposure for FAFSA purposes. Is there a time limit (eg, when is last possible time) to liquidate or reduce that account before filing FAFSA?</p>
<p>To file 2013-2014 FAFSA, you would need 2012 tax information. You want to liquidate the UGTMA accounts in 2011, so that you report any capital gains in 2011 not 2012.</p>
<p>You report the amount of the UTMA as of the date you file FAFSA. If the funds have been spent prior to that date, they are not reported (other than any capital gains, which would appear on your prior year’s taxes as 4kidsdad states).</p>