Comment by s1artibartfast
16 hours ago
Isn't the entire point of these assessments to look at total assets, and not just annual income?
I dont think this was an oversight or mistake. I think the expectation was that yes, people should sell assets if they have them .
The "mistake" is that the assets themselves are the source of income. Sell them off, and the income goes away too. It's the equivalent of expecting the parents to use 100% of their income to put their kids into college, which is impossible.
IF I have stock and make $XX,XXX in dividends, how is that different? IF I have own apartments and make $XX,XXX in rent, how is that different?
I think the idea is that Yes, the expectation is for people to make actual sacrifice before they qualify.
If this was inventory they were counting, sure. But you can’t sell part of a small business. Let’s say the parents own a restaurant, and the value of the land, building, and kitchen equipment is a few million. Do they sell an oven from the kitchen to put you through school? Sell the parking lot?
It’s an all or nothing thing. The business needs all its assets to function, and shouldn’t be considered any more than for its income potential.
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That's economic suicide not sacrifice, for many small businesses the asset produces the revenue. Sell the asset you may as well close the business. It is not a fair assessment of a family's means at all.
It's not equivalent to making all your income off one rental and having to sell it, but it is closer to that. If you sell it, you have no income now. But a small business also creates jobs and provides novel value to the community, so even more is lost than just a single income.
Running a small business is not the same as owning stock. I can own stock and can still work and one does not affect the other in terms of time or capability. On the other hand, selling your small business is equivalent to quitting your job.
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It would be similar if your stock dividends were your sole irreplaceable means of support. So, you sell your stock and give the money to MIT. Now you can’t buy more stock, and therefore have no future income. Permanently ending your career to send your kid to college is an unreasonable sacrifice, in my book.
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A bunch of stock is a source of income too, but it wouldn't be wrong to use some of it.
If the business is worth enough then selling it can replace all the income you would have ever gotten from it. It's not as simple as "income goes away". The specific numbers make all the difference.
> A bunch of stock is a source of income too, but it wouldn't be wrong to use some of it.
Normal US tax law that most people fall under says no, stock itself is not income. It's only taxed at the time of sale. If you ask for mark to market taxing then any increase in market value during the calendar year will count as income -- even if you didn't sell anything throughout the year. But usually those people are drawing a direct income from trading.
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Should they also cut their kidneys out and sell those too?
For someone not in your system, the expectations that seem normal to you sound absolutely insane to others.
Does MIT include the market value of their kidneys in their assessment? You might have lost track of what is being discussed here.
Anyway no, they should not cut their kidneys out and sell them.
Nobody is forcing them to pay this price any more than you are forced to sell a kidney for a private jet.
Education costs are out of control, but you can still get a degree elsewhere for 10% the MIT cost, and have it paid for entirely by the government if you are low income
I'd ask how the assets are structured internally.
Is it a small business netting the owner 100K a year with 500K in the bank?
That's different than a small business netting the owner 75K a year but the trucks and equipment for the landscaping business (easiest example, replace as needed) being worth 200K...
It's complicated.