school financial aid system can be a great friend to farmers and small business owners. The FAFSA, free application for federal student aid, has special provisions based in shape to meet the unique financial situation of farmers and small business owners.
Farmers do not have to report farm property if they live on and operate the farm. These assets are
- tractors, combines and other equipment
- and farm accounts
If your family is the only investor in the town and do not actively participate in its activities, you can not exclude farm assets from financial aid calculations. Farmers must be active members excluded the town from their FAFSA.
Small business owners get very similar diseases. If control of your family, and at least 50% of companies with fewer than 100 full-time or full-time equivalent employees, the value of the Company need not be reported on the FAFSA.
“Your family” does not necessarily immediate family of mom, dad, 2.5 children and a dog. “Family” may include any immediately related families such as:
- brothers or sisters in-law.
For example, if your father is the owner of 30% of the business, and your uncle owns 30% of the business, and a family friend at 40%; then the owner of the family 60% and may qualify for small business exclusion.
Just as a family farm exclusion, all business assets excluded from the FAFSA calculations.
This gives business owners and farmers tremendous flexibility in the financial process. They have prepared shelters available to them at any time. If families find they have assets in excess of the asset protection allowance, they can easily move assets from their personal accounts to business or farm accounts. And when working with a good accountant, a family business or farm can often absorb taxable income while ensuring needed cash.