Discussion 5 Skip the Dorm, Buy Your Kid a Condo

Paying for college is a bill that many parents need help with and if there are ways that can help them reduce or save money then the choice is clear. Tuition costs whether you attend state or private universities. If there is a way that parents can reduce the costs associated with school then that's the way to go. Apart from college tuition, there are additional costs such as books, food, and housing. If parents choose for their kids to stay on campus then they must be ready for the costs that are associated with that. There are many parents that choose to have their child live on campus because it might be a more viable option. Other parents may choose the housing alternative and have their child live off campus because they are able to split the cost with another student or students. The other option would be for the parent to purchase a condo and rent it to their child as a way to benefit from the cost of paying for housing. This way the parent can rent the shared space to another student who can also share in the cost of paying for the rent. Depending on how many rooms the condo has, the more money the parent can collect to offset the cost. If the condo is used by you or a relative more than a little bit then the owner will not be able to deduct losses incurred from owning or renting the condo. The exception rule applies when the owner rents the condo at market rate to the family member who uses the property as a primary residence. In this case, the student would be able to rent the condo as his or her primary residence while attending school. The student would get the money from a third party to pay for his or her rent just as they would in a school dorm. Once the student finishes school then the parent can sell the condo for a profit once they have owned the property for over a year. In total, the benefits of a parent buying a condo for the housing of their child would have more of a significant benefit rather than staying in a dorm.
Discussion 5 Skip the Dorm, Buy your kid a Condo John Cox 22 22 unread replies. 26 26 replies. The attached article, Skip the Dorm, Buy your kid a Condo , discusses some tax planning measures that you can readily identify with and that coincide with LO 5 Real Estate Rentals of Ch 14 as well as Passive Activities that we covered in Ch 7. Read the article and see if you agree with the author's suggestions. Alternatively, do you think the IRS would have any issues here? Comment on your thoughts. No required length. This topic was locked Apr 25 at 11:59pm. Skip the dorm article.docx Saved in OneDrive
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