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The issue is that a single member LLC is a disregarded entity unless you specifically elected it to be treated as a corporation.
Disregarded - generally means ignored for income tax purposes - so all assets owned by such single member LLC and all income received by that LLC - are considered as owned and received by the owner - and are reported on owner's individual tax return as if there were no any LLC.
So - yes - you are treated as the owners of these investment properties and as a recipient of investment income - for tax reporting and FAFSA purposes - regardless if you have an LLC or own these assets directly.
Another question - if these are rental properties or you are running a business?Rental activity is specifically classified as passive - so that passive income is NOT subject of self-employment taxes, while business income will be subject to both - income taxes and self-employment taxes.
First of all - you MAY categorize this LLC as a small business IF the LLC runs business activity.
If the only activity that LLC participates is rental - that would be be passive activity - unless you are a real estate professional.
Generally - for FAFSA purposes - it doesn't matter if you run an activity as a physical person or run it though the LLC - it will be classified as business or as passive rental activity based on your specific circumstances.
Regarding tax treatment - depending on the state you are living that LLC still may be treated as disregarded entity if only members are husband and wife,
But generally - such LLC is classified as a partnership and files its own partnership tax return (form 1065) and issues K1 statements to each partner.
When you run the LLC as business activity - on K1
business income or loss will be reported in box 1 and in box 14 as Self-employment earnings.
If FAFSA will verify your tax return - they will be looking for these amounts as an indication of having a business.