If you are supporting your parents (grandparents), give them appreciated securities (held more than 12 months) instead of cash for their support. They can cash in the securities and pay as little as 0% tax on the appreciation.
The parents reduced their income $5,000 by shifting capital gains to grandparents. The tax benefits is $750 ( $5,000 x (15% – 0%)) and since the parents income is assessed at 47%, the income reduction may increase the child’s financial aid eligibility by $2,350 ($5,000 x 47%).
The tax benefits is $750 ( $5,000 x (15% – 0%)) and if you are in a financial aid income assessment rate of 47%, you could increase your financial aid eligibility up to $470 for every $1,000 of income reduction by shifting capital gains to grandparents.