Could Buying a Rental Home Really Help Pay for College?
It’s back to school and for many that means school supplies and new clothes, but what about kids who are heading off to college? Their expenses are much greater than a few new outfits, pencils, paper and glue sticks. Besides the cost of tuition, most college students have to deal with the added expenses of room and board. Add it all up and college is definitely expensive. But what if there were a way to make your room and board expenses work for you, in the form of a nice tax break?
It is possible and it could actually be a great way to save. Here’s how it works. You buy a rental property for your own child to live in and have him/her find a few roommates. There are several advantages to this arrangement if you do it right. First, you get to keep the normal tax deductions that you would from owning a rental property. You can also hire your child to be the property manager and then use the net income you pay your child towards his/her tuition, with either very little, or no tax at all. Meanwhile, the monthly rent payments from the roommates can go towards the mortgage payment.
After graduation, you have two options. You can hold onto the property and continue renting it until it’s paid off and then use it as a retirement property. You could also use it for a 1031 exchange, which would allow you to defer the tax on your capital gain if you buy another “like-kind” property. So, if you have the ability to invest in a rental property you could save yourself thousands in college expenses and taxes.
Deducting Start-Up Expenses: An Open Or Shut Case
Deducting Start-Up Expenses Starting a business typically takes more than a little know-how. More often than not, it requires cold, hard cash. However, there is some good news — you may qualify for a little help from Uncle Sam in the form of a tax deduction for some of your start- up costs. The costs,…
Putting Kids to the Test
Putting Kids to the Test by Elizabeth Bowden-David This past week, my father-in-law called up my husband to give him an earnest admonition. Referring to Cicero, he said: “Understand that is it your duty to give your children a better education than you had.” I’m not sure what prompted him to remind us of this…
Survive the Recession by Starting Your Own Business
Survive the Recession by Starting Your Own Business Are you an entrepreneur at heart? Many Americans idolize the American Dream; the “get rich quick” mentality. But, how many make it happen? Starting a business requires hard work, and even then it is not guaranteed that it will succeed. In fact, in the US, only 51%…
Economic Tip: Re-energize Your Business Mission and Vision Statements
Economic Tip: Re-energize Your Business Mission and Vision Statements By: Don Midgett Survival! Many businesses are looking for answers to deal successfully in the current economic climate. All the planning, capital, marketing and organizational decisions seem outside the realm of what was “business as normal.” Do not panic. Resist the urge for a complete overhaul.…