#529 ELIGIBLE EXPENSES BUYING PROPERTY HOW TO#

The Education Plan is administered by The Education Trust Board of New Mexico. Keep in mind that state-based benefits should be one of many appropriately weighted factors to be considered when making an investment decision. You also may wish to contact directly your home state’s 529 plan(s), or any other 529 plan, to learn more about those plan’s features, benefits and limitations. You also should consult a financial, tax, or other advisor to learn more about how state-based benefits (or any limitations) would apply to your specific circumstances. Please Note: Before you invest, consider whether your or the beneficiary’s home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in that state’s qualified tuition program. Otherwise, I don't think there is enough benefit to justify the time and expense involved.For more information about The Education Plan, call 1.877.337.5268 or view the Plan Description and Participation Agreement, which includes investment objectives, risks, charges, expenses, and other important information read and consider it carefully before investing.

If you really want a rental property, then buy one without regard to what your kids do for college. You'd have no way to know that her younger sister would want to attend the same school, and even if she did, she also might not stay there. Even if you waited to buy it until the oldest one attended college, you have no idea how long she would stay at that school (she could transfer, drop out, or get expelled). The costs of buying and maintaining a rental property would not be worth it to me. This hypothetical situation I'm talking about is also 15 years away, so lots can change between now and then. I'm not sure if there would be a big difference between those two scenarios. The intent would actually be to save money on housing expenses by buying a property, instead of having the children rent apartments. There is the CO state income tax deduction on contributions though. You also have to remember that any money you are getting 'paid' form the 529 is coming form you anyway. Are there any obvious problems with that?Įven if it's legal, it doesn't seem worth the additional expense of buying a rental property. So buy a property that your children live in, run the property as a rental, while taking some part of the 529 distribution that pays for tuition, fees, etc, to also pay a portion of the rent.

#529 ELIGIBLE EXPENSES BUYING PROPERTY HOW TO#

The article even has a CPA on record getting quoted about how to do this correctly. Here is a fairly recent article describing something like this, but the scenario in this article is one where the child student lives at home, and the parents charge the child rent for his bedroom, and get some portion of that rent reimbursed by 529 distributions. Those costs are usually determined by the university itself, and as I understand it, are usually related to the cost of living on campus in a dorm. There is a certain amount that can be withdrawn from a 529 plan as a qualified distribution for student housing costs ('room and board' costs). Now, add in a potential to use distributions from a 529 plan to cover part of the rent. I don't think that experience is anything unusual. My intent would be to manage it like a rental property, charging them 'market rent', accounting for expenses, depreciation, etc.

They are about 3 school grades apart, so there could be something like a 7 year period where at least one of them would live in a rental property that I buy and rent to them. The scenario is my two daughters attending the same university. I'm wondering if anyone has done something like this, and what some potential legal issues would be.

529 eligible expenses buying property