<p>Kelsmom, I am very glad you provided clarification from the federal verification guide about what qualifies as a family business. The OP references guidance from finaid.org. While I realize this is a well-respected website, their guidance on this particular issue seems to be at odds with the fed. ver. guide. Finaid.org says, “…more than 50% of the voting rights must be owned by the family as listed in household size on the FAFSA…
If the small business is a partnership where each partner owns exactly half of the business, and the family is one partner and a third party is the other, it does not qualify for the small business exclusion. In order to qualify, the family must own a majority of the business (more than half)… If the small business is owned and controlled by the extended family, but is not owned and controlled by the family as reported on the FAFSA, it does not qualify for the small business exclusion.” I have emailed finaid.org twice trying to clarify this very situation (parent owns 50% of business, sibling of parent owns 50%) and have never received a reply (has been four months). Thanks again.</p>