FAFSA 2025-26: Do S corp commercial real estate properties count as investments?

Yes, you absolutely need to report this. The S corporation is a pass-through entity, so for FAFSA purposes, your husband is considered an owner of the real estate investment. You should report the net worth of his ownership share in the S corporation (including the value of the commercial property minus any related debt) under the "investments" section. It doesn't matter that it's under a different business name - what matters is your husband's ownership interest in the entity that holds the property.

im pretty sure you don't need to include it because its a business asset not a personal investment. My dad had same situation with his LLC and the financial aid office told us not to list it because it's a business not an investment property

When I was completing FAFSA last year, I spent hours researching this exact issue for my wife's business property. According to the official FAFSA guidelines for 2025-2026, S corporation assets are considered investments for the purpose of financial aid calculations. You need to report the net worth of your husband's ownership share in the business (assets minus liabilities). Since real estate is involved, you'll need to include: 1. Current market value of the commercial property (your percentage ownership) 2. Minus any debts against that property 3. Plus any other business assets 4. Minus any other business liabilities The resulting figure goes in the investments section. Don't just report the K-1 income - that's already captured in your AGI from your tax return. The FAFSA wants the asset value too.

As someone who works with small business owners on FAFSA applications, I can confirm that S corporation assets, including commercial real estate, must be reported on the FAFSA as investments. Here's why: the FAFSA considers your ownership interest in the business as an investment asset. For the 2025-2026 FAFSA, you'll need to report: - The net worth of your husband's ownership percentage in the S corporation - This includes all business assets (including the real estate) minus all business liabilities Since your husband owns 100% of the S corp, you would report 100% of the business's net worth. Don't make the common mistake of only reporting distributed income - the actual business value must be included too.

I was in the EXACT same situation last year with my S-corp. Spent HOURS on hold trying to reach someone at Federal Student Aid to get a clear answer. When I finally got through, they confirmed that S-corp assets (including real estate) ARE reportable as investments on the FAFSA. The representative explained that since S-corps are pass-through entities, your husband is considered to have an ownership interest in all the business assets. For anyone struggling to get through to FSA on the phone, I finally used Claimyr.com which got me through to an agent in about 10 minutes instead of waiting for hours. They have a video demo at https://youtu.be/TbC8dZQWYNQ showing how it works. Totally worth it to get an official answer directly from FSA.

Remember to check with ur tax guy too!! Our CPA said it depends on if its a investment property or an active business. if u just own the building and rent it out = investment, if its actually a operating business = not counted. BUT!!! The rules change all the time and I heard the new FAFSA is different from before!!

Just to provide complete accuracy here: for the 2025-2026 FAFSA, S corporation assets (including commercial real estate) must be reported as investments. The property value minus any related debt is included in the Investment Net Worth section. The fact that it's under a different business name doesn't matter - what matters is your husband's percentage ownership of the S corporation. This is different from the Small Business Exclusion, which only applies to businesses with fewer than 100 full-time employees where your family owns AND controls more than 50%. Most S corporations used for real estate holdings don't qualify for this exclusion. I recommend getting documentation of the current market value of the property and any outstanding mortgages or loans against it before completing this section.

I went through this exact same situation two years ago with my family's S corp that owns several commercial properties. After consulting with both our CPA and a financial aid specialist, here's what I learned: The key thing to understand is that for FAFSA purposes, your husband's ownership stake in the S corp makes him an indirect owner of all the business assets, including the real estate. Even though the property is titled under the business name, the FAFSA looks through the corporate structure to the individual ownership. You'll need to calculate the net worth of his ownership percentage in the S corp: - Current fair market value of all business assets (including the commercial property) - Minus all business liabilities (mortgages, loans, etc.) - Multiply by his ownership percentage (100% in your case) One helpful tip: if you're unsure about the current property value, you can use the assessed value from your most recent property tax assessment as a reasonable estimate, or get a professional appraisal if the numbers are significant enough to materially affect your aid eligibility. The income from the K-1 is already captured in your tax return, so don't double-count that - the FAFSA wants the underlying asset value in addition to the income you already reported.

I just went through this same process last month and can confirm what others have said - you definitely need to report the S corp real estate as an investment. I was initially confused too because it felt like a "business asset" rather than a personal investment, but the FAFSA doesn't see it that way. One thing that helped me was thinking of it this way: if your husband sold his ownership in the S corp tomorrow, he would receive money based on the value of all the business assets (including that commercial property). That's why the FAFSA considers it an investment asset that could potentially be liquidated to pay for college. The process was actually pretty straightforward once I understood the rules: 1. Got the current market value of our commercial property (we used a recent appraisal) 2. Subtracted the outstanding mortgage balance 3. Added any other business assets (bank accounts, equipment, etc.) 4. Subtracted any other business debts 5. The net result went in the investments section Don't forget to keep good documentation of all these numbers in case the school's financial aid office asks for verification later. Good luck with your FAFSA!

I'm dealing with a similar situation but with a twist - my spouse owns 50% of an S corp that holds commercial real estate, and the other 50% is owned by a business partner. Do I still need to report our share as an investment? And if so, do I report 50% of the total property value minus debts, or do I need to somehow determine what our specific ownership stake is worth? The property generates income but it's all reinvested back into the business rather than distributed to us personally. I'm worried about overreporting or underreporting this on the FAFSA.

I'm a financial aid officer at a state university and can confirm what most others have said here - S corporation real estate assets absolutely must be reported on the FAFSA as investments. This is one of the most commonly misunderstood areas I see when reviewing applications. The key point is that S corps are "pass-through" entities for tax purposes, which means the FAFSA treats your husband as having direct ownership of the business assets proportional to his ownership stake. Since he owns 100% of the S corp, you need to report 100% of the business's net worth (assets minus liabilities) in the investments section. A few practical tips from what I've seen work well: - Use the most recent property appraisal if you have one, or the assessed value from property taxes as a reasonable estimate - Include ALL business assets and liabilities, not just the real estate - Keep documentation ready - we often request verification of business asset values during the aid review process - Don't double-count the K-1 income (that's already in your AGI) I know it seems unfair that business assets count against financial aid eligibility, but the logic is that these represent wealth that could theoretically be liquidated to pay education expenses. The rules are the same whether it's a small rental property or a large commercial building.

I'm a CPA who specializes in education tax planning and can add some additional clarity here. Yes, you absolutely must report the S corp real estate as an investment on the FAFSA. One important detail I haven't seen mentioned yet: when calculating the net worth to report, make sure you're using the BUSINESS value of the assets and liabilities, not personal guarantees. For example, if there's a commercial mortgage on the property but your husband personally guaranteed it, you still only report the business-level debt that shows on the S corp's balance sheet. Also, timing matters - the FAFSA asks for asset values as of the date you submit the form, so if property values in your area have changed significantly since your last appraisal, you may want to get an updated estimate. Many commercial real estate professionals can provide a basic market analysis for a reasonable fee if the numbers are material to your aid calculation. One last tip: if this is a significant asset that might affect your aid eligibility, consider consulting with a financial aid professional before submitting. Sometimes there are legitimate planning strategies (like timing of distributions or business restructuring) that can help optimize your financial aid position while staying completely within the rules.

I'm going through this exact same situation right now and found this thread incredibly helpful! Just wanted to add one more resource that might help others - the Federal Student Aid website has a specific section about business assets that confirms what everyone here is saying about S corps. What really helped me understand it was realizing that even though the property is "owned" by the S corp on paper, my ownership percentage in the corporation gives me a proportional claim on all the business assets. So if I own 100% of an S corp that owns a $500k building with a $200k mortgage, I need to report $300k as an investment asset. One thing I'm still figuring out is how to handle depreciation - the property's book value on the business balance sheet is much lower than fair market value due to accumulated depreciation over the years. For FAFSA purposes, I believe we use current fair market value, not the depreciated book value, but I'm double-checking this with our accountant. Thanks to everyone who shared their experiences here - it's made navigating this complex situation so much easier!

As someone who just completed my FAFSA with a similar S corp situation, I wanted to share a helpful resource I discovered. The IRS Publication 535 (Business Expenses) actually has a section that explains how S corp assets are treated for various reporting purposes, which helped me understand why the FAFSA considers them personal investments rather than business assets. What really clicked for me was learning that the "economic substance" matters more than the legal form. Even though the property is legally owned by the S corp, you have the economic benefit and risk of ownership through your stock ownership. If the property appreciates, you benefit. If it loses value, you're affected. That's why the FAFSA treats it as your investment asset. One practical tip: if you're having trouble determining current fair market value, many county assessor websites now have online tools that show recent comparable sales in your area. It's not as precise as a professional appraisal, but it can give you a reasonable estimate for FAFSA purposes. Just make sure to document how you arrived at your valuation in case the financial aid office asks for supporting information later. The whole process is definitely more complex than it seems at first, but once you understand the underlying logic, it becomes much more manageable!

I just went through this exact situation last month with my husband's S corp that owns two commercial properties. After reading through all these responses and consulting with our CPA, I can confirm that you definitely need to report this as an investment asset on your FAFSA. Here's what made it finally click for me: think of your husband's S corp ownership like owning shares in a company that happens to own real estate instead of manufacturing widgets. The fact that it's commercial property under a different business name doesn't change the fundamental ownership structure - he owns 100% of an entity that owns valuable assets. For our situation, we ended up calculating: - Current fair market value of both properties (we used recent county assessment values) - Minus outstanding commercial mortgages on both properties - Plus business checking account balance - Minus any other business liabilities - Total net worth = what we reported in the investments section One thing that really helped was creating a simple spreadsheet with all the assets and liabilities clearly laid out. This made it easier to double-check our math and will be useful if the financial aid office requests documentation later. The silver lining is that once you understand the logic behind it, the actual calculation is pretty straightforward. Good luck with your FAFSA!

I'm dealing with a very similar situation and this thread has been incredibly helpful! My wife owns 75% of an S corp that holds a small office building we rent out to local businesses. I was initially hesitant to report it as an investment since it felt more like a business asset, but after reading everyone's explanations about pass-through entities and economic ownership, it makes complete sense. One question I haven't seen addressed: how do you handle improvements or capital expenditures that might affect the property value? We did about $30k in renovations last year that increased the building's value, but I'm not sure if I should use the pre-renovation assessed value or try to estimate the current value including improvements. Also, for anyone else in this situation, I found that our commercial insurance company was able to provide a replacement cost estimate that helped us gauge current market value - might be worth asking your insurance agent if you're struggling with valuation like I was. The consensus here is clear though - S corp real estate definitely needs to be reported. Thanks everyone for sharing your experiences!

I'm new to this community but facing a very similar situation with my family's S corp that owns rental properties. This thread has been incredibly educational! Reading through everyone's experiences and the expert advice from the financial aid officer and CPA really helped me understand why S corp assets must be reported as investments on the FAFSA. What I found most helpful was the explanation about "pass-through" entities and how the FAFSA looks at the economic substance rather than just the legal ownership structure. The analogy of thinking about it like owning shares in a company that happens to own real estate instead of other assets really made it click for me. I'm curious - for those who have been through this process, did you find that reporting the S corp assets significantly impacted your financial aid eligibility? I'm trying to prepare mentally for how this might affect our Expected Family Contribution. We have a modest commercial property but I'm worried even a small business asset might hurt our aid prospects. Also, has anyone had experience with financial aid offices requesting additional documentation or verification of the S corp asset values? I want to make sure I have all the right paperwork ready just in case. Thanks to everyone who shared their knowledge here - this community is such a valuable resource for navigating these complex FAFSA situations!