Family Income Urgent question Forum

[admisionquestion]

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]

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]

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?

[SA1928]

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]

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]

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?