essentially	a	savings	account,	and	its	value	as	an	asset	is	the	current	balance	of	the	account.
Coverdell	education	savings	accounts,	or	ESAs,	are	another	tax-advantaged	savings	vehicle	for	college	education.	They
are	treated	the	same	as	college	savings	plans:	the	current	balance	is	an	asset	of	the	account	owner.
If	distributions	from	QTPs	and	ESAs	do	not	exceed	the	qualified	education	expenses	for	which	they	are	intended,	they	are
tax-free,	so	they	will	not	appear	in	the	next	year9s	AGI.	They	should	not	be	treated	as	other	financial	assistance	(OFA).	For
more	information	on	these	benefits,	see	the	IRS9s	Publication	970,	Tax	Benefits	for	Education.
Rental	properties	are	an	asset.	A	unit	within	a	family	home	that	has	its	own	entrance,	kitchen,	and	bath	(therefore	a
rented	bedroom	would	not	count)	and	that	is	rented	to	someone	other	than	a	family	member	counts	as	an	asset.	To
calculate	its	net	value,	multiply	the	net	value	of	the	entire	structure	by	the	fraction	the	rented	space	represents.	Similarly,
if	a	family	owned	a	10-unit	apartment	building	and	lived	in	one	of	the	apartments,	9/10	or	90%	of	the	net	value	of	the
building	would	be	an	asset.
Take-back	mortgage	value	should	be	reported	as	an	asset.	In	a	take-back	mortgage,	the	seller	of	a	house	finances	a
portion	of	its	cost	for	the	buyer,	who	repays	this	additional	mortgage	to	the	seller.	The	seller	reports	the	interest	part	of
any	payments	received	from	the	buyer	on	Schedule	B	of	IRS	Form	1040.	Therefore,	if	such	interest	is	reported	on	a	tax
return,	it	likely	indicates	an	asset	that	should	be	reported	on	the	FAFSA	form:	the	value	of	the	take-back	mortgage.	There
would	be	no	debt	reported	against	this	asset.	For	example,	if	an	individual	sold	their	house	for	$200,000	and	financed	a
take	back	mortgage	of	$40,000	to	the	buyer,	the	seller	should	report	$40,000	as	the	net	worth	of	the	investment.	The
worth	will	decrease	each	year	depending	on	how	much	of	the	principal	the	buyer	paid	back	that	year.	This	concept	applies
to	other	forms	of	seller	financing	of	the	sale	of	a	home	or	other	property.
Virtual	currency	(or	cryptocurrency)	such	as	Bitcoin	is	considered	an	asset.	The	value	(in	U.S.	dollars	as	of	the	day	the
FAFSA	form	is	completed)	of	virtual	currency	must	be	reported	on	the	FAFSA	form.	If	the	owner	sells	virtual	currency	and
has	a	capital	gain	from	the	sale,	the	taxable	portion	will	be	in	the	AGI	for	the	year	it	is	reported	on	the	tax	return,	and	the
AGI	will	then	be	included	on	the	associated	FAFSA	form.	For	more	information	on	how	the	IRS	treats	virtual	currencies,
please	see	the	
IRS	virtual	currency	webpage.
Uniform	Gifts	and	Uniform	Transfers	to	Minors	Acts	(UGMA	and	UTMA)	allow	the	establishment	of	an	account	for
gifts	of	cash	and	financial	assets	for	a	minor	without	the	expense	of	creating	a	trust.	Because	the	minor	is	the	owner	of
the	account,	it	counts	as	the	minor9s	asset	on	the	FAFSA	form,	not	the	asset	of	the	custodian,	who	is	often	the	parent.
Trust	funds	are	considered	an	asset	of	the	named	beneficiary	of	the	trust,	even	if	the	beneficiary9s	access	to	the	trust	is
restricted.	If	the	settlor	of	a	trust	has	voluntarily	placed	restrictions	on	its	use,	then	the	beneficiary	should	report	its
present	value	as	an	asset,	as	discussed	below.	If	a	trust	has	been	restricted	by	court	order,	however,	the	beneficiary
should	not	report	it.	An	example	of	such	a	restricted	trust	is	one	set	up	by	court	order	to	pay	for	future	surgery	for	the
victim	of	a	car	accident.
How	the	trust	must	be	reported	depends	on	whether	the	beneficiary	receives	or	will	receive	the	interest	income,	the	trust
principal,	or	both.	In	the	case	of	a	divorce	or	separation	where	the	trust	is	owned	jointly	and	ownership	is	not	being
contested,	the	property	and	the	debt	are	equally	divided	between	the	owners	for	reporting	purposes	unless	the	terms	of
the	trust	specify	some	other	method	of	division.
If	a	beneficiary	receives	interest	only	from	the	trust,	any	interest	received	in	the	base	year	must	be	reported	as	income.
If	the	interest	accumulates	and	is	not	paid	out,	the	recipient	must	report	an	asset	value	for	the	interest	they	will	receive.
The	trust	officer	can	usually	calculate	the	value	of	the	interest	the	person	will	receive	while	the	trust	exists.	This	value
represents	the	amount	a	third	person	would	be	willing	to	pay	for	the	interest	income.
The	person	who	will	receive	principal	only	from	the	trust	must	report	the	present	value	of	his	or	her	right	to	that
principal	as	an	asset.	For	example,	if	a	$10,000	principal	reverts	to	a	student9s	parent	when	the	trust	ends	in	ten	years
and	the	student	is	receiving	the	interest,	the	student	would	report	the	interest	received	as	income	and	the	present	value
of	the	student9s	parent9s	rights	to	the	principal	is	reported	as	an	asset	of	the	parent	(if	the	student	is	required	to	report
parental	data)	on	the	student9s	FAFSA	form.	The	present	value	of	the	principal	can	be	calculated	by	the	trust	officer;	it9s
the	amount	that	a	third	person	would	pay	for	the	right	to	receive	the	principal	ten	years	from	now4basically,	the	amount
that	one	would	have	to	deposit	now	to	receive	$10,000	in	ten	years.
If	a	beneficiary	receives	both	interest	and	principal	from	the	trust,	the	beneficiary	should	report	the	present	value	of
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