Family Income Urgent question

Discuss various money matters here. Loans (federal and private), scholarships, lottery winnings, or other school finance related information and queries.
admisionquestion
Posts: 473
Joined: Sun Sep 26, 2010 12:16 am

Family Income Urgent question

Postby admisionquestion » Fri Sep 23, 2011 1:57 pm

I have a unique question.

I am a dependent. My families income is under 20,000 last year. We might be winning a lawsuit for about 50,000.

How much will this hurt my financial aid?
Will it be better to incur this expense after Jan 1? (I am 2011-12 cycle)
Other possible ideas?

kahechsof
Posts: 332
Joined: Fri Aug 26, 2011 7:26 pm

Re: Family Income Urgent question

Postby kahechsof » Fri Sep 23, 2011 2:00 pm

Winning a lawsuit will probably not be counted towards your income by schools.
As far as taxes go, I think it will be not counted toward income to the extent it is actual damages for physical injury, 26 USC 104; or is damage to property 26 USC 1033. (punitive is income.)

admisionquestion
Posts: 473
Joined: Sun Sep 26, 2010 12:16 am

Re: Family Income Urgent question

Postby admisionquestion » Fri Sep 23, 2011 2:09 pm

Thanks for the informed response. Here is the situation:

My family sold a business, but the other party has failed to pay. We are suing for them to pay the remainder (plus legal expenses). If we win will it count as income?

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SA1928
Posts: 182
Joined: Sun Sep 26, 2010 7:10 pm

Re: Family Income Urgent question

Postby SA1928 » Fri Sep 23, 2011 2:11 pm

Hey, here is an article that seems to somewhat provide an answer to your question: http://www.nj.com/business/index.ssf/20 ... ure_o.html

kahechsof
Posts: 332
Joined: Fri Aug 26, 2011 7:26 pm

Re: Family Income Urgent question

Postby kahechsof » Fri Sep 23, 2011 2:12 pm

admisionquestion wrote:Thanks for the informed response. Here is the situation:

My family sold a business, but the other party has failed to pay. We are suing for them to pay the remainder (plus legal expenses). If we win will it count as income?


Yes, forcing him to pay will be probably be income. (ABA disclaimer: I am not a lawyer).
It will probably be capital gains income, over whatever basis you had in the business.
Still, I wouldn't worry about it. Your returns will show that it is a one time boon.
Besides, income of 70k is not exactly enough to finance your law school anyway.

admisionquestion
Posts: 473
Joined: Sun Sep 26, 2010 12:16 am

Re: Family Income Urgent question

Postby admisionquestion » Fri Sep 23, 2011 2:22 pm

Thanks again,

That article was helpful.

Follow up question:

Is there any way to get a sense of how much financial aid I will get from a given school by need. I know LSN will help with overall package, but is there any rule of thumb or rough way to calculate what need based (grant) money I might get?




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