Any Financial Planners/Accountants out there? Need some advice. Please read.

[Mje]

Ok, hypothetically, lets say I won $10,000 when I was 7, paid in a zero coupon bond that matured when I was 18 and I haven't cashed it in yet becuase I'm in college and get a good bit of financial aid. Right now it doesn't effect student aid, but if this hypothetical person were to cash it in the state will expect me to use 33.3% of my funds to pay for college. I've paid taxes on the interest every year till it matured, so all the taxes are paid up. I don't think it will count as income, because I already paid taxes on it, is that correct? The hypothetical person would like to earn at least some interest in it. What should the hypothetical person do? Not cash it in for a couple years? Will it be lost if it's not cashed in? Should I cash it in and bury it in my backyard?

Thanks in advance,
--Mje

 

[dquan97]

I would "gift" the $ to a trusted person, so they can take care of it while you're in college. That way, the financial aid people won't see that your friend is entrusted with $10K. Another thing you could do, although this takes time, is to redeem the bond, open a retirement account (ie Roth IRA) and deposit the $ a year at a time, since retirement accounts are exempt from financial aid reporting.