How is an inheritance counted?

<p>This year a relative died and left us about 15 thousand dollars. I was wondering if anybody knows if that would be counted as income on our Profile or Fafsa. Or does it go in another category. We are in the lower income category normally. thanks.</p>

<p>It will not be counted as income from what I have heard. It WILL however be counted as cash on hand. Check with your financial aid office at your child's intended school.</p>

<p>The IRS does not include inheritance money in taxable income, so FAFSA and Profile most likely don't either. It still counts as assets though, so a percentage of it will still be counted toward the EFC, but it's much smaller than if it were counted as income.</p>

<p>What about the FAFSA/CSS question about any monies received from other sources? Would you put the inheritance money there or only where it shows up as an asset?</p>

<p>For instance, if mellowmom got the $15,000 and bought a car for cash, would the inheritance even show up any where on the FAFSA? I don't think so. On the Profile, I think maybe under the question about money from other sources. </p>

<p>What do you guys think?</p>

<p>Actually, we immediately paid off a small loan with the cash so there is nothing to speak of at this point. But I'm sure we will write it on the form under income not reported elsewhere.</p>

<p>thanks for the info!</p>

<p>Please call your school before you shoot yourself in the foot. It is not "income from other sources" as it is by definition -not income. It is "from other sources", but it's not "income".If I gave you a gift of $1000.00 , is that income from other sources? No. A gift, or an inheritance (a testamentary gift, if you like), whether in Kind (the house, the car) or in cash, is not income . It is an asset and once spent it is just gone. <strong><em>Come'on CPAs help me out here.LOL.</em></strong>*</p>

<p>My understanding is that money inherited is treated as an asset (savings of some sort)...assuming it all hasn't been spent.</p>

<p>Its a wash. Since you paid off a loan, then the loan status is reduced. And where the other income status would also be reduced since you paid the loan. I wouldn't even mention the inhert. since you paid a loan off. Net effect to you is that your cash flow looks better now-but only know that. Just amend your Profile and FAFSA if you have already completed or put your true, "current" status when you complete the forms in Jan 2005.</p>